Correlation Between Sumi Indo and Tira Austenite
Can any of the company-specific risk be diversified away by investing in both Sumi Indo and Tira Austenite 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 Sumi Indo and Tira Austenite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumi Indo Kabel and Tira Austenite Tbk, you can compare the effects of market volatilities on Sumi Indo and Tira Austenite 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 Sumi Indo with a short position of Tira Austenite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumi Indo and Tira Austenite.
Diversification Opportunities for Sumi Indo and Tira Austenite
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumi and Tira is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sumi Indo Kabel and Tira Austenite Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tira Austenite Tbk and Sumi Indo 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 Sumi Indo Kabel are associated (or correlated) with Tira Austenite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tira Austenite Tbk has no effect on the direction of Sumi Indo i.e., Sumi Indo and Tira Austenite go up and down completely randomly.
Pair Corralation between Sumi Indo and Tira Austenite
Assuming the 90 days trading horizon Sumi Indo is expected to generate 1.5 times less return on investment than Tira Austenite. But when comparing it to its historical volatility, Sumi Indo Kabel is 1.27 times less risky than Tira Austenite. It trades about 0.05 of its potential returns per unit of risk. Tira Austenite Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 40,200 in Tira Austenite Tbk on November 24, 2024 and sell it today you would earn a total of 62,300 from holding Tira Austenite Tbk or generate 154.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.79% |
Values | Daily Returns |
Sumi Indo Kabel vs. Tira Austenite Tbk
Performance |
Timeline |
Sumi Indo Kabel |
Tira Austenite Tbk |
Sumi Indo and Tira Austenite Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sumi Indo and Tira Austenite
The main advantage of trading using opposite Sumi Indo and Tira Austenite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumi Indo position performs unexpectedly, Tira Austenite 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 Tira Austenite will offset losses from the drop in Tira Austenite's long position.Sumi Indo vs. Jembo Cable | ||
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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