Correlation Between PT Indosat and ENVVENO MEDICAL

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

By analyzing existing cross correlation between PT Indosat Tbk and ENVVENO MEDICAL DL 00001, you can compare the effects of market volatilities on PT Indosat and ENVVENO MEDICAL 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 PT Indosat with a short position of ENVVENO MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indosat and ENVVENO MEDICAL.

Diversification Opportunities for PT Indosat and ENVVENO MEDICAL

-0.03

Correlation Coefficient

PT Indosat  ENVVENO MEDICAL

Good diversification

The 3 months correlation between IDO1 and ENVVENO is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PT Indosat Tbk and ENVVENO MEDICAL DL 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENVVENO MEDICAL DL and PT Indosat 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 PT Indosat Tbk are associated (or correlated) with ENVVENO MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENVVENO MEDICAL DL has no effect on the direction of PT Indosat i.e., PT Indosat and ENVVENO MEDICAL go up and down completely randomly.

Pair Corralation between PT Indosat and ENVVENO MEDICAL

Assuming the 90 days trading horizon PT Indosat is expected to generate 3.27 times less return on investment than ENVVENO MEDICAL. In addition to that, PT Indosat is 3.37 times more volatile than ENVVENO MEDICAL DL 00001. It trades about 0.01 of its total potential returns per unit of risk. ENVVENO MEDICAL DL 00001 is currently generating about 0.06 per unit of volatility. If you would invest  238.00  in ENVVENO MEDICAL DL 00001 on December 21, 2024 and sell it today you would earn a total of  26.00  from holding ENVVENO MEDICAL DL 00001 or generate 10.92% return on investment over 90 days.

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

PT Indosat Tbk  vs.  ENVVENO MEDICAL DL 00001

PT Indosat Tbk

Risk-Adjusted Performance

Very Weak

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

ENVVENO MEDICAL DL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ENVVENO MEDICAL DL 00001 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ENVVENO MEDICAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Indosat and ENVVENO MEDICAL

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

The idea behind PT Indosat Tbk and ENVVENO MEDICAL DL 00001 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.