Correlation Between Tambun Indah and Rubberex M

Can any of the company-specific risk be diversified away by investing in both Tambun Indah and Rubberex M 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 Tambun Indah and Rubberex M into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tambun Indah Land and Rubberex M, you can compare the effects of market volatilities on Tambun Indah and Rubberex M 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 Tambun Indah with a short position of Rubberex M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tambun Indah and Rubberex M.

Diversification Opportunities for Tambun Indah and Rubberex M

0.37

Correlation Coefficient

Tambun Indah  Rubberex M

Weak diversification

The 3 months correlation between Tambun and Rubberex is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tambun Indah Land and Rubberex M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubberex M and Tambun Indah 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 Tambun Indah Land are associated (or correlated) with Rubberex M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubberex M has no effect on the direction of Tambun Indah i.e., Tambun Indah and Rubberex M go up and down completely randomly.

Pair Corralation between Tambun Indah and Rubberex M

Assuming the 90 days trading horizon Tambun Indah Land is expected to under-perform the Rubberex M. But the stock apears to be less risky and, when comparing its historical volatility, Tambun Indah Land is 2.45 times less risky than Rubberex M. The stock trades about -0.05 of its potential returns per unit of risk. The Rubberex M is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Rubberex M on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Rubberex M or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.56%
Values	Daily Returns

Tambun Indah Land  vs.  Rubberex M

Tambun Indah Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tambun Indah Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Tambun Indah is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Rubberex M

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rubberex M are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Rubberex M is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Tambun Indah and Rubberex M

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

The idea behind Tambun Indah Land and Rubberex M 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.