Correlation Between Humpuss Intermoda and PT Techno9

Can any of the company-specific risk be diversified away by investing in both Humpuss Intermoda and PT Techno9 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 Humpuss Intermoda and PT Techno9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Humpuss Intermoda Transportasi and PT Techno9 Indonesia, you can compare the effects of market volatilities on Humpuss Intermoda and PT Techno9 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 Humpuss Intermoda with a short position of PT Techno9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humpuss Intermoda and PT Techno9.

Diversification Opportunities for Humpuss Intermoda and PT Techno9

-0.87

Correlation Coefficient

Humpuss Intermoda  PT Techno9

Pay attention - limited upside

The 3 months correlation between Humpuss and NINE is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Humpuss Intermoda Transportasi and PT Techno9 Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Techno9 Indonesia and Humpuss Intermoda 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 Humpuss Intermoda Transportasi are associated (or correlated) with PT Techno9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Techno9 Indonesia has no effect on the direction of Humpuss Intermoda i.e., Humpuss Intermoda and PT Techno9 go up and down completely randomly.

Pair Corralation between Humpuss Intermoda and PT Techno9

Assuming the 90 days trading horizon Humpuss Intermoda Transportasi is expected to under-perform the PT Techno9. In addition to that, Humpuss Intermoda is 1.0 times more volatile than PT Techno9 Indonesia. It trades about -0.21 of its total potential returns per unit of risk. PT Techno9 Indonesia is currently generating about 0.23 per unit of volatility. If you would invest  20,400  in PT Techno9 Indonesia on November 28, 2024 and sell it today you would earn a total of  2,000  from holding PT Techno9 Indonesia or generate 9.8% return on investment over 90 days.

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

Humpuss Intermoda Transportasi  vs.  PT Techno9 Indonesia

Humpuss Intermoda

Risk-Adjusted Performance

Very Weak

Over the last 90 days Humpuss Intermoda Transportasi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

PT Techno9 Indonesia

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in PT Techno9 Indonesia are ranked lower than 47 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Techno9 disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Humpuss Intermoda and PT Techno9

The main advantage of trading using opposite Humpuss Intermoda and PT Techno9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humpuss Intermoda position performs unexpectedly, PT Techno9 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 Techno9 will offset losses from the drop in PT Techno9's long position.

The idea behind Humpuss Intermoda Transportasi and PT Techno9 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.