Correlation Between Western Copper and PT Indosat
Can any of the company-specific risk be diversified away by investing in both Western Copper and PT Indosat 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 Western Copper and PT Indosat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and PT Indosat Tbk, you can compare the effects of market volatilities on Western Copper and PT Indosat 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 Western Copper with a short position of PT Indosat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and PT Indosat.
Diversification Opportunities for Western Copper and PT Indosat
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and IDO1 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and PT Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indosat Tbk and Western Copper 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 Western Copper and are associated (or correlated) with PT Indosat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indosat Tbk has no effect on the direction of Western Copper i.e., Western Copper and PT Indosat go up and down completely randomly.
Pair Corralation between Western Copper and PT Indosat
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the PT Indosat. But the stock apears to be less risky and, when comparing its historical volatility, Western Copper and is 1.77 times less risky than PT Indosat. The stock trades about -0.01 of its potential returns per unit of risk. The PT Indosat Tbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 13.00 in PT Indosat Tbk on September 25, 2024 and sell it today you would earn a total of 2.00 from holding PT Indosat Tbk or generate 15.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Western Copper and vs. PT Indosat Tbk
Performance |
Timeline |
Western Copper |
PT Indosat Tbk |
Western Copper and PT Indosat Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Copper and PT Indosat
The main advantage of trading using opposite Western Copper and PT Indosat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, PT Indosat 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 PT Indosat will offset losses from the drop in PT Indosat's long position.Western Copper vs. COSMOSTEEL HLDGS | Western Copper vs. MITSUBISHI STEEL MFG | Western Copper vs. Gaztransport Technigaz SA | Western Copper vs. NIPPON STEEL SPADR |
PT Indosat vs. Jacquet Metal Service | PT Indosat vs. International Consolidated Airlines | PT Indosat vs. Wizz Air Holdings | PT Indosat vs. Western Copper and |
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 Stocks Directory module to find actively traded stocks across global markets.
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