Correlation Between Integra Indocabinet and Steel Pipe
Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Steel Pipe at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Integra Indocabinet and Steel Pipe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integra Indocabinet Tbk and Steel Pipe Industry, you can compare the effects of market volatilities on Integra Indocabinet and Steel Pipe and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Integra Indocabinet with a short position of Steel Pipe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and Steel Pipe.
Diversification Opportunities for Integra Indocabinet and Steel Pipe
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Integra and Steel is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Steel Pipe Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Pipe Industry and Integra Indocabinet is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Integra Indocabinet Tbk are associated (or correlated) with Steel Pipe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Pipe Industry has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Steel Pipe go up and down completely randomly.
Pair Corralation between Integra Indocabinet and Steel Pipe
Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to generate 5.72 times more return on investment than Steel Pipe. However, Integra Indocabinet is 5.72 times more volatile than Steel Pipe Industry. It trades about 0.15 of its potential returns per unit of risk. Steel Pipe Industry is currently generating about -0.44 per unit of risk. If you would invest 30,800 in Integra Indocabinet Tbk on August 28, 2024 and sell it today you would earn a total of 4,200 from holding Integra Indocabinet Tbk or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Integra Indocabinet Tbk vs. Steel Pipe Industry
Performance |
| Timeline |
| Integra Indocabinet Tbk |
| Steel Pipe Industry |
Integra Indocabinet and Steel Pipe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integra Indocabinet and Steel Pipe
The main advantage of trading using opposite Integra Indocabinet and Steel Pipe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra Indocabinet position performs unexpectedly, Steel Pipe can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Steel Pipe will offset losses from the drop in Steel Pipe's long position.| Integra Indocabinet vs. Buyung Poetra Sembada | Integra Indocabinet vs. Erajaya Swasembada Tbk | Integra Indocabinet vs. Sariguna Primatirta PT | Integra Indocabinet vs. Puradelta Lestari PT |
| Steel Pipe vs. Semen Baturaja Persero | Steel Pipe vs. Bekasi Fajar Industrial | Steel Pipe vs. Krakatau Steel Persero | Steel Pipe vs. Saranacentral Bajatama Tbk |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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