Correlation Between Integra Indocabinet and Panca Budi
Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Panca Budi 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 Panca Budi 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 Panca Budi Idaman, you can compare the effects of market volatilities on Integra Indocabinet and Panca Budi 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 Panca Budi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and Panca Budi.
Diversification Opportunities for Integra Indocabinet and Panca Budi
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Integra and Panca is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Panca Budi Idaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panca Budi Idaman 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 Panca Budi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panca Budi Idaman has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Panca Budi go up and down completely randomly.
Pair Corralation between Integra Indocabinet and Panca Budi
Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to generate 1.96 times more return on investment than Panca Budi. However, Integra Indocabinet is 1.96 times more volatile than Panca Budi Idaman. It trades about 0.01 of its potential returns per unit of risk. Panca Budi Idaman is currently generating about -0.01 per unit of risk. If you would invest 32,200 in Integra Indocabinet Tbk on September 3, 2024 and sell it today you would lose (400.00) from holding Integra Indocabinet Tbk or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integra Indocabinet Tbk vs. Panca Budi Idaman
Performance |
| Timeline |
| Integra Indocabinet Tbk |
| Panca Budi Idaman |
Integra Indocabinet and Panca Budi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integra Indocabinet and Panca Budi
The main advantage of trading using opposite Integra Indocabinet and Panca Budi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra Indocabinet position performs unexpectedly, Panca Budi 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 Panca Budi will offset losses from the drop in Panca Budi'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 |
| Panca Budi vs. Timah Persero Tbk | Panca Budi vs. Semen Indonesia Persero | Panca Budi vs. Mitra Pinasthika Mustika | Panca Budi vs. Jakarta Int Hotels |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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