Correlation Between Hensel Davest and Tourindo Guide

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

By analyzing existing cross correlation between Hensel Davest Indonesia and Tourindo Guide Indonesia, you can compare the effects of market volatilities on Hensel Davest and Tourindo Guide 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 Hensel Davest with a short position of Tourindo Guide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hensel Davest and Tourindo Guide.

Diversification Opportunities for Hensel Davest and Tourindo Guide

-0.29

Correlation Coefficient

Hensel Davest  Tourindo Guide

Very good diversification

The 3 months correlation between Hensel and Tourindo is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hensel Davest Indonesia and Tourindo Guide Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourindo Guide Indonesia and Hensel Davest 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 Hensel Davest Indonesia are associated (or correlated) with Tourindo Guide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourindo Guide Indonesia has no effect on the direction of Hensel Davest i.e., Hensel Davest and Tourindo Guide go up and down completely randomly.

Pair Corralation between Hensel Davest and Tourindo Guide

Assuming the 90 days trading horizon Hensel Davest Indonesia is expected to generate 1.66 times more return on investment than Tourindo Guide. However, Hensel Davest is 1.66 times more volatile than Tourindo Guide Indonesia. It trades about 0.08 of its potential returns per unit of risk. Tourindo Guide Indonesia is currently generating about 0.09 per unit of risk. If you would invest  1,600  in Hensel Davest Indonesia on December 23, 2024 and sell it today you would earn a total of  300.00  from holding Hensel Davest Indonesia or generate 18.75% return on investment over 90 days.

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

Hensel Davest Indonesia  vs.  Tourindo Guide Indonesia

Hensel Davest Indonesia

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hensel Davest Indonesia are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Hensel Davest disclosed solid returns over the last few months and may actually be approaching a breakup point.

Tourindo Guide Indonesia

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tourindo Guide Indonesia are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Tourindo Guide disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hensel Davest and Tourindo Guide

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

The idea behind Hensel Davest Indonesia and Tourindo Guide Indonesia 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.