Correlation Between Scottish Mortgage and HEXINDO ADIPERKASA

Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage and HEXINDO ADIPERKASA 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 Scottish Mortgage and HEXINDO ADIPERKASA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Scottish Mortgage Investment and HEXINDO ADIPERKASA, you can compare the effects of market volatilities on Scottish Mortgage and HEXINDO ADIPERKASA 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 Scottish Mortgage with a short position of HEXINDO ADIPERKASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and HEXINDO ADIPERKASA.

Diversification Opportunities for Scottish Mortgage and HEXINDO ADIPERKASA

-0.84

Correlation Coefficient

Scottish Mortgage  HEXINDO ADIPERKASA

Pay attention - limited upside

The 3 months correlation between Scottish and HEXINDO is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and HEXINDO ADIPERKASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXINDO ADIPERKASA and Scottish Mortgage 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 Scottish Mortgage Investment are associated (or correlated) with HEXINDO ADIPERKASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXINDO ADIPERKASA has no effect on the direction of Scottish Mortgage i.e., Scottish Mortgage and HEXINDO ADIPERKASA go up and down completely randomly.

Pair Corralation between Scottish Mortgage and HEXINDO ADIPERKASA

Assuming the 90 days trading horizon Scottish Mortgage Investment is expected to under-perform the HEXINDO ADIPERKASA. But the stock apears to be less risky and, when comparing its historical volatility, Scottish Mortgage Investment is 2.64 times less risky than HEXINDO ADIPERKASA. The stock trades about -0.06 of its potential returns per unit of risk. The HEXINDO ADIPERKASA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  26.00  in HEXINDO ADIPERKASA on October 8, 2024 and sell it today you would earn a total of  1.00  from holding HEXINDO ADIPERKASA or generate 3.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Scottish Mortgage Investment  vs.  HEXINDO ADIPERKASA

Scottish Mortgage

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Scottish Mortgage Investment are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Scottish Mortgage reported solid returns over the last few months and may actually be approaching a breakup point.

HEXINDO ADIPERKASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEXINDO ADIPERKASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Scottish Mortgage and HEXINDO ADIPERKASA

The main advantage of trading using opposite Scottish Mortgage and HEXINDO ADIPERKASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage position performs unexpectedly, HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA will offset losses from the drop in HEXINDO ADIPERKASA's long position.

The idea behind Scottish Mortgage Investment and HEXINDO ADIPERKASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.