Correlation Between Ricky Putra and Tifico Fiber

Can any of the company-specific risk be diversified away by investing in both Ricky Putra and Tifico Fiber 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 Ricky Putra and Tifico Fiber into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ricky Putra Globalindo and Tifico Fiber Indonesia, you can compare the effects of market volatilities on Ricky Putra and Tifico Fiber 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 Ricky Putra with a short position of Tifico Fiber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ricky Putra and Tifico Fiber.

Diversification Opportunities for Ricky Putra and Tifico Fiber

0.56

Correlation Coefficient

Ricky Putra  Tifico Fiber

Very weak diversification

The 3 months correlation between Ricky and Tifico is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ricky Putra Globalindo and Tifico Fiber Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tifico Fiber Indonesia and Ricky Putra 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 Ricky Putra Globalindo are associated (or correlated) with Tifico Fiber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tifico Fiber Indonesia has no effect on the direction of Ricky Putra i.e., Ricky Putra and Tifico Fiber go up and down completely randomly.

Pair Corralation between Ricky Putra and Tifico Fiber

Assuming the 90 days trading horizon Ricky Putra Globalindo is expected to under-perform the Tifico Fiber. In addition to that, Ricky Putra is 1.93 times more volatile than Tifico Fiber Indonesia. It trades about -0.13 of its total potential returns per unit of risk. Tifico Fiber Indonesia is currently generating about -0.21 per unit of volatility. If you would invest  63,500  in Tifico Fiber Indonesia on December 30, 2024 and sell it today you would lose (13,500) from holding Tifico Fiber Indonesia or give up 21.26% of portfolio value over 90 days.

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

Ricky Putra Globalindo  vs.  Tifico Fiber Indonesia

Ricky Putra Globalindo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ricky Putra Globalindo 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Tifico Fiber Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tifico Fiber Indonesia 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Ricky Putra and Tifico Fiber

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

The idea behind Ricky Putra Globalindo and Tifico Fiber Indonesia 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.