Correlation Between PLANT VEDA and PT Hexindo

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

By analyzing existing cross correlation between PLANT VEDA FOODS and PT Hexindo Adiperkasa, you can compare the effects of market volatilities on PLANT VEDA and PT Hexindo 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 PLANT VEDA with a short position of PT Hexindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLANT VEDA and PT Hexindo.

Diversification Opportunities for PLANT VEDA and PT Hexindo

0.0

Correlation Coefficient

PLANT VEDA  PT Hexindo

Pay attention - limited upside

The 3 months correlation between PLANT and HX1A is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PLANT VEDA FOODS and PT Hexindo Adiperkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Hexindo Adiperkasa and PLANT VEDA 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 PLANT VEDA FOODS are associated (or correlated) with PT Hexindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Hexindo Adiperkasa has no effect on the direction of PLANT VEDA i.e., PLANT VEDA and PT Hexindo go up and down completely randomly.

Pair Corralation between PLANT VEDA and PT Hexindo

If you would invest  1.15  in PLANT VEDA FOODS on September 26, 2024 and sell it today you would earn a total of  0.00  from holding PLANT VEDA FOODS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PLANT VEDA FOODS  vs.  PT Hexindo Adiperkasa

PLANT VEDA FOODS

Risk-Adjusted Performance

0 of 100

Very Weak

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

PT Hexindo Adiperkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Hexindo Adiperkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PLANT VEDA and PT Hexindo

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

The idea behind PLANT VEDA FOODS and PT 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 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.