Correlation Between Tira Austenite and Tempo Inti

Can any of the company-specific risk be diversified away by investing in both Tira Austenite and Tempo Inti 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 Tira Austenite and Tempo Inti into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tira Austenite Tbk and Tempo Inti Media, you can compare the effects of market volatilities on Tira Austenite and Tempo Inti 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 Tira Austenite with a short position of Tempo Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tira Austenite and Tempo Inti.

Diversification Opportunities for Tira Austenite and Tempo Inti

-0.62

Correlation Coefficient

Tira Austenite  Tempo Inti

Excellent diversification

The 3 months correlation between Tira and Tempo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tira Austenite Tbk and Tempo Inti Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempo Inti Media and Tira Austenite 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 Tira Austenite Tbk are associated (or correlated) with Tempo Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempo Inti Media has no effect on the direction of Tira Austenite i.e., Tira Austenite and Tempo Inti go up and down completely randomly.

Pair Corralation between Tira Austenite and Tempo Inti

Assuming the 90 days trading horizon Tira Austenite Tbk is expected to generate 0.97 times more return on investment than Tempo Inti. However, Tira Austenite Tbk is 1.03 times less risky than Tempo Inti. It trades about 0.12 of its potential returns per unit of risk. Tempo Inti Media is currently generating about -0.16 per unit of risk. If you would invest  36,000  in Tira Austenite Tbk on September 4, 2024 and sell it today you would earn a total of  14,000  from holding Tira Austenite Tbk or generate 38.89% return on investment over 90 days.

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

Tira Austenite Tbk  vs.  Tempo Inti Media

Tira Austenite Tbk

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tira Austenite Tbk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Tira Austenite disclosed solid returns over the last few months and may actually be approaching a breakup point.

Tempo Inti Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tempo Inti Media 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 Tira Austenite and Tempo Inti

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

The idea behind Tira Austenite Tbk and Tempo Inti Media 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 Directory module to find actively traded commodities issued by global exchanges.