Correlation Between PT Indosat and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both PT Indosat and Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum, you can compare the effects of market volatilities on PT Indosat and Kaiser Aluminum 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 Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indosat and Kaiser Aluminum.
Diversification Opportunities for PT Indosat and Kaiser Aluminum
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IDO1 and Kaiser is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding PT Indosat Tbk and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 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 Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of PT Indosat i.e., PT Indosat and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between PT Indosat and Kaiser Aluminum
Assuming the 90 days trading horizon PT Indosat Tbk is expected to generate 10.06 times more return on investment than Kaiser Aluminum. However, PT Indosat is 10.06 times more volatile than Kaiser Aluminum. It trades about 0.02 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about -0.04 per unit of risk. If you would invest 16.00 in PT Indosat Tbk on December 28, 2024 and sell it today you would lose (9.40) from holding PT Indosat Tbk or give up 58.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Indosat Tbk vs. Kaiser Aluminum
Performance |
Timeline |
PT Indosat Tbk |
Kaiser Aluminum |
PT Indosat and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Indosat and Kaiser Aluminum
The main advantage of trading using opposite PT Indosat and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indosat position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum's long position.PT Indosat vs. Spirent Communications plc | PT Indosat vs. Geely Automobile Holdings | PT Indosat vs. SAN MIGUEL BREWERY | PT Indosat vs. UNITED UTILITIES GR |
Kaiser Aluminum vs. Kingdee International Software | Kaiser Aluminum vs. GEELY AUTOMOBILE | Kaiser Aluminum vs. CARSALESCOM | Kaiser Aluminum vs. Firan Technology Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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