Correlation Between Indosterling Technomedia and Sepatu Bata

Can any of the company-specific risk be diversified away by investing in both Indosterling Technomedia and Sepatu Bata 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 Indosterling Technomedia and Sepatu Bata into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indosterling Technomedia Tbk and Sepatu Bata Tbk, you can compare the effects of market volatilities on Indosterling Technomedia and Sepatu Bata 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 Indosterling Technomedia with a short position of Sepatu Bata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosterling Technomedia and Sepatu Bata.

Diversification Opportunities for Indosterling Technomedia and Sepatu Bata

0.0

Correlation Coefficient

Indosterling Technomedia  Sepatu Bata

Pay attention - limited upside

The 3 months correlation between Indosterling and Sepatu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indosterling Technomedia Tbk and Sepatu Bata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sepatu Bata Tbk and Indosterling Technomedia 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 Indosterling Technomedia Tbk are associated (or correlated) with Sepatu Bata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sepatu Bata Tbk has no effect on the direction of Indosterling Technomedia i.e., Indosterling Technomedia and Sepatu Bata go up and down completely randomly.

Pair Corralation between Indosterling Technomedia and Sepatu Bata

If you would invest  5,000  in Indosterling Technomedia Tbk on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Indosterling Technomedia Tbk or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Indosterling Technomedia Tbk  vs.  Sepatu Bata Tbk

Indosterling Technomedia

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Indosterling Technomedia Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Indosterling Technomedia is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Sepatu Bata Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sepatu Bata Tbk 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Indosterling Technomedia and Sepatu Bata

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

The idea behind Indosterling Technomedia Tbk and Sepatu Bata Tbk 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.