Correlation Between 360 Finance and INDOSAT -B-

Can any of the company-specific risk be diversified away by investing in both 360 Finance and INDOSAT -B- 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 360 Finance and INDOSAT -B- into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 360 Finance and INDOSAT B , you can compare the effects of market volatilities on 360 Finance and INDOSAT -B- 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 360 Finance with a short position of INDOSAT -B-. Check out your portfolio center. Please also check ongoing floating volatility patterns of 360 Finance and INDOSAT -B-.

Diversification Opportunities for 360 Finance and INDOSAT -B-

0.16

Correlation Coefficient

360 Finance  INDOSAT -B-

Average diversification

The 3 months correlation between 360 and INDOSAT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding 360 Finance and INDOSAT B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDOSAT -B- and 360 Finance 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 360 Finance are associated (or correlated) with INDOSAT -B-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDOSAT -B- has no effect on the direction of 360 Finance i.e., 360 Finance and INDOSAT -B- go up and down completely randomly.

Pair Corralation between 360 Finance and INDOSAT -B-

Given the investment horizon of 90 days 360 Finance is expected to generate 0.78 times more return on investment than INDOSAT -B-. However, 360 Finance is 1.28 times less risky than INDOSAT -B-. It trades about 0.12 of its potential returns per unit of risk. INDOSAT B is currently generating about 0.0 per unit of risk. If you would invest  1,448  in 360 Finance on October 4, 2024 and sell it today you would earn a total of  2,421  from holding 360 Finance or generate 167.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

360 Finance  vs.  INDOSAT B

360 Finance

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 360 Finance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, 360 Finance displayed solid returns over the last few months and may actually be approaching a breakup point.

INDOSAT -B-

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INDOSAT B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with 360 Finance and INDOSAT -B-

The main advantage of trading using opposite 360 Finance and INDOSAT -B- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 360 Finance position performs unexpectedly, INDOSAT -B- 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 INDOSAT -B- will offset losses from the drop in INDOSAT -B-'s long position.

The idea behind 360 Finance and INDOSAT B 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.