Correlation Between Ifishdeco and Indonesia Fibreboard
Can any of the company-specific risk be diversified away by investing in both Ifishdeco and Indonesia Fibreboard 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 Ifishdeco and Indonesia Fibreboard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ifishdeco PT and Indonesia Fibreboard Industry, you can compare the effects of market volatilities on Ifishdeco and Indonesia Fibreboard 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 Ifishdeco with a short position of Indonesia Fibreboard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ifishdeco and Indonesia Fibreboard.
Diversification Opportunities for Ifishdeco and Indonesia Fibreboard
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ifishdeco and Indonesia is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ifishdeco PT and Indonesia Fibreboard Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indonesia Fibreboard and Ifishdeco 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 Ifishdeco PT are associated (or correlated) with Indonesia Fibreboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indonesia Fibreboard has no effect on the direction of Ifishdeco i.e., Ifishdeco and Indonesia Fibreboard go up and down completely randomly.
Pair Corralation between Ifishdeco and Indonesia Fibreboard
Assuming the 90 days trading horizon Ifishdeco PT is expected to under-perform the Indonesia Fibreboard. In addition to that, Ifishdeco is 1.43 times more volatile than Indonesia Fibreboard Industry. It trades about -0.14 of its total potential returns per unit of risk. Indonesia Fibreboard Industry is currently generating about 0.11 per unit of volatility. If you would invest 18,242 in Indonesia Fibreboard Industry on September 12, 2024 and sell it today you would earn a total of 2,758 from holding Indonesia Fibreboard Industry or generate 15.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ifishdeco PT vs. Indonesia Fibreboard Industry
Performance |
Timeline |
Ifishdeco PT |
Indonesia Fibreboard |
Ifishdeco and Indonesia Fibreboard Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ifishdeco and Indonesia Fibreboard
The main advantage of trading using opposite Ifishdeco and Indonesia Fibreboard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ifishdeco position performs unexpectedly, Indonesia Fibreboard 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 Indonesia Fibreboard will offset losses from the drop in Indonesia Fibreboard's long position.Ifishdeco vs. Gunung Raja Paksi | Ifishdeco vs. Cita Mineral Investindo | Ifishdeco vs. Central Omega Resources | Ifishdeco vs. Indonesia Fibreboard Industry |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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