Correlation Between FAIR ISAAC and PT Indo

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

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

Diversification Opportunities for FAIR ISAAC and PT Indo

0.68

Correlation Coefficient

FAIR ISAAC  PT Indo

Poor diversification

The 3 months correlation between FAIR and 3IB is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding FAIR ISAAC 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 FAIR ISAAC 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 FAIR ISAAC 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 FAIR ISAAC i.e., FAIR ISAAC and PT Indo go up and down completely randomly.

Pair Corralation between FAIR ISAAC and PT Indo

Assuming the 90 days trading horizon FAIR ISAAC is expected to generate 0.62 times more return on investment than PT Indo. However, FAIR ISAAC is 1.6 times less risky than PT Indo. It trades about -0.26 of its potential returns per unit of risk. PT Indo Tambangraya is currently generating about -0.21 per unit of risk. If you would invest  204,100  in FAIR ISAAC on October 12, 2024 and sell it today you would lose (13,000) from holding FAIR ISAAC or give up 6.37% of portfolio value over 90 days.

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

FAIR ISAAC  vs.  PT Indo Tambangraya

FAIR ISAAC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FAIR ISAAC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, FAIR ISAAC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

PT Indo Tambangraya

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Indo Tambangraya are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, PT Indo is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FAIR ISAAC and PT Indo

The main advantage of trading using opposite FAIR ISAAC and PT Indo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAIR ISAAC 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 FAIR ISAAC 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.