Correlation Between SYSTEMAIR and PT Indo

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

By analyzing existing cross correlation between SYSTEMAIR AB and PT Indo Tambangraya, you can compare the effects of market volatilities on SYSTEMAIR and PT Indo 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 SYSTEMAIR with a short position of PT Indo. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and PT Indo.

Diversification Opportunities for SYSTEMAIR and PT Indo

0.38

Correlation Coefficient

SYSTEMAIR  PT Indo

Weak diversification

The 3 months correlation between SYSTEMAIR and 3IB is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and PT Indo Tambangraya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indo Tambangraya and SYSTEMAIR 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 SYSTEMAIR AB are associated (or correlated) with PT Indo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indo Tambangraya has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and PT Indo go up and down completely randomly.

Pair Corralation between SYSTEMAIR and PT Indo

Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 0.79 times more return on investment than PT Indo. However, SYSTEMAIR AB is 1.27 times less risky than PT Indo. It trades about -0.01 of its potential returns per unit of risk. PT Indo Tambangraya is currently generating about -0.16 per unit of risk. If you would invest  768.00  in SYSTEMAIR AB on December 21, 2024 and sell it today you would lose (19.00) from holding SYSTEMAIR AB or give up 2.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SYSTEMAIR AB  vs.  PT Indo Tambangraya

SYSTEMAIR AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days SYSTEMAIR AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SYSTEMAIR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PT Indo Tambangraya

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Indo Tambangraya has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with SYSTEMAIR and PT Indo

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

The idea behind SYSTEMAIR AB and PT Indo Tambangraya 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.

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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .