Correlation Between PT Techno9 and Akasha Wira

Can any of the company-specific risk be diversified away by investing in both PT Techno9 and Akasha Wira 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 Techno9 and Akasha Wira into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Techno9 Indonesia and Akasha Wira International, you can compare the effects of market volatilities on PT Techno9 and Akasha Wira 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 Techno9 with a short position of Akasha Wira. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Techno9 and Akasha Wira.

Diversification Opportunities for PT Techno9 and Akasha Wira

0.2

Correlation Coefficient

PT Techno9  Akasha Wira

Modest diversification

The 3 months correlation between NINE and Akasha is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PT Techno9 Indonesia and Akasha Wira International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akasha Wira International and PT Techno9 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 Techno9 Indonesia are associated (or correlated) with Akasha Wira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akasha Wira International has no effect on the direction of PT Techno9 i.e., PT Techno9 and Akasha Wira go up and down completely randomly.

Pair Corralation between PT Techno9 and Akasha Wira

Assuming the 90 days trading horizon PT Techno9 Indonesia is expected to generate 3.96 times more return on investment than Akasha Wira. However, PT Techno9 is 3.96 times more volatile than Akasha Wira International. It trades about 0.14 of its potential returns per unit of risk. Akasha Wira International is currently generating about 0.09 per unit of risk. If you would invest  12,900  in PT Techno9 Indonesia on December 30, 2024 and sell it today you would earn a total of  6,600  from holding PT Techno9 Indonesia or generate 51.16% return on investment over 90 days.

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

PT Techno9 Indonesia  vs.  Akasha Wira International

PT Techno9 Indonesia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Techno9 Indonesia are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Techno9 disclosed solid returns over the last few months and may actually be approaching a breakup point.

Akasha Wira International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akasha Wira International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Akasha Wira may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PT Techno9 and Akasha Wira

The main advantage of trading using opposite PT Techno9 and Akasha Wira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Techno9 position performs unexpectedly, Akasha Wira 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 Akasha Wira will offset losses from the drop in Akasha Wira's long position.

The idea behind PT Techno9 Indonesia and Akasha Wira International 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..