Correlation Between Communication Cable and PT Hetzer

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

By analyzing existing cross correlation between Communication Cable Systems and PT Hetzer Medical, you can compare the effects of market volatilities on Communication Cable and PT Hetzer 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 Communication Cable with a short position of PT Hetzer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Cable and PT Hetzer.

Diversification Opportunities for Communication Cable and PT Hetzer

0.0

Correlation Coefficient

Communication Cable  PT Hetzer

Pay attention - limited upside

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

Pair Corralation between Communication Cable and PT Hetzer

Assuming the 90 days trading horizon Communication Cable Systems is expected to generate 1.01 times more return on investment than PT Hetzer. However, Communication Cable is 1.01 times more volatile than PT Hetzer Medical. It trades about -0.01 of its potential returns per unit of risk. PT Hetzer Medical is currently generating about -0.05 per unit of risk. If you would invest  63,000  in Communication Cable Systems on December 1, 2024 and sell it today you would lose (23,400) from holding Communication Cable Systems or give up 37.14% of portfolio value over 90 days.

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

Communication Cable Systems  vs.  PT Hetzer Medical

Communication Cable

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Communication Cable Systems are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Communication Cable disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Hetzer Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Hetzer Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Hetzer 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 Communication Cable and PT Hetzer

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

The idea behind Communication Cable Systems and PT Hetzer Medical 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 CEOs Directory module to screen CEOs from public companies around the world.