Correlation Between Intermedia Capital and PT Pelayaran

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

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

Diversification Opportunities for Intermedia Capital and PT Pelayaran

-0.52

Correlation Coefficient

Intermedia Capital  PT Pelayaran

Excellent diversification

The 3 months correlation between Intermedia and TAMU is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Intermedia Capital Tbk and PT Pelayaran Tamarin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Pelayaran Tamarin and Intermedia Capital 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 Intermedia Capital Tbk are associated (or correlated) with PT Pelayaran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Pelayaran Tamarin has no effect on the direction of Intermedia Capital i.e., Intermedia Capital and PT Pelayaran go up and down completely randomly.

Pair Corralation between Intermedia Capital and PT Pelayaran

Assuming the 90 days trading horizon Intermedia Capital Tbk is expected to generate 1.08 times more return on investment than PT Pelayaran. However, Intermedia Capital is 1.08 times more volatile than PT Pelayaran Tamarin. It trades about 0.41 of its potential returns per unit of risk. PT Pelayaran Tamarin is currently generating about 0.02 per unit of risk. If you would invest  1,000.00  in Intermedia Capital Tbk on December 29, 2024 and sell it today you would earn a total of  2,300  from holding Intermedia Capital Tbk or generate 230.0% return on investment over 90 days.

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

Intermedia Capital Tbk  vs.  PT Pelayaran Tamarin

Intermedia Capital Tbk

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Intermedia Capital Tbk are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Intermedia Capital disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Pelayaran Tamarin

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Pelayaran Tamarin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Pelayaran may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Intermedia Capital and PT Pelayaran

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

The idea behind Intermedia Capital Tbk and PT Pelayaran Tamarin 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.