Correlation Between Intikeramik Alamasri and Cahayaputra Asa

Can any of the company-specific risk be diversified away by investing in both Intikeramik Alamasri and Cahayaputra Asa 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 Intikeramik Alamasri and Cahayaputra Asa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intikeramik Alamasri Industri and Cahayaputra Asa Keramik, you can compare the effects of market volatilities on Intikeramik Alamasri and Cahayaputra Asa 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 Intikeramik Alamasri with a short position of Cahayaputra Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intikeramik Alamasri and Cahayaputra Asa.

Diversification Opportunities for Intikeramik Alamasri and Cahayaputra Asa

-0.45

Correlation Coefficient

Intikeramik Alamasri  Cahayaputra Asa

Very good diversification

The 3 months correlation between Intikeramik and Cahayaputra is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Intikeramik Alamasri Industri and Cahayaputra Asa Keramik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cahayaputra Asa Keramik and Intikeramik Alamasri 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 Intikeramik Alamasri Industri are associated (or correlated) with Cahayaputra Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cahayaputra Asa Keramik has no effect on the direction of Intikeramik Alamasri i.e., Intikeramik Alamasri and Cahayaputra Asa go up and down completely randomly.

Pair Corralation between Intikeramik Alamasri and Cahayaputra Asa

Assuming the 90 days trading horizon Intikeramik Alamasri Industri is expected to generate 2.1 times more return on investment than Cahayaputra Asa. However, Intikeramik Alamasri is 2.1 times more volatile than Cahayaputra Asa Keramik. It trades about 0.03 of its potential returns per unit of risk. Cahayaputra Asa Keramik is currently generating about 0.0 per unit of risk. If you would invest  1,000.00  in Intikeramik Alamasri Industri on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Intikeramik Alamasri Industri or generate 0.0% return on investment over 90 days.

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

Intikeramik Alamasri Industri  vs.  Cahayaputra Asa Keramik

Intikeramik Alamasri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intikeramik Alamasri Industri 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Cahayaputra Asa Keramik

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cahayaputra Asa Keramik are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Cahayaputra Asa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Intikeramik Alamasri and Cahayaputra Asa

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

The idea behind Intikeramik Alamasri Industri and Cahayaputra Asa Keramik 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 Transaction History module to view history of all your transactions and understand their impact on performance.