Correlation Between INDO RAMA and H M

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

By analyzing existing cross correlation between INDO RAMA SYNTHETIC and H M Hennes, you can compare the effects of market volatilities on INDO RAMA and H 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 INDO RAMA with a short position of H M. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDO RAMA and H M.

Diversification Opportunities for INDO RAMA and H M

0.0

Correlation Coefficient

INDO RAMA  H M

Pay attention - limited upside

The 3 months correlation between INDO and HMSB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INDO RAMA SYNTHETIC and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes and INDO RAMA 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 INDO RAMA SYNTHETIC are associated (or correlated) with H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of INDO RAMA i.e., INDO RAMA and H M go up and down completely randomly.

Pair Corralation between INDO RAMA and H M

Assuming the 90 days trading horizon INDO RAMA SYNTHETIC is expected to under-perform the H M. But the stock apears to be less risky and, when comparing its historical volatility, INDO RAMA SYNTHETIC is 1.23 times less risky than H M. The stock trades about -0.02 of its potential returns per unit of risk. The H M Hennes is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  386.00  in H M Hennes on October 4, 2024 and sell it today you would earn a total of  910.00  from holding H M Hennes or generate 235.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.0%
Values	Daily Returns

INDO RAMA SYNTHETIC  vs.  H M Hennes

INDO RAMA SYNTHETIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INDO RAMA SYNTHETIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, INDO RAMA is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

H M Hennes

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in H M Hennes are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental drivers, H M may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with INDO RAMA and H M

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

The idea behind INDO RAMA SYNTHETIC and H M Hennes 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.