Correlation Between Infrastrutture Wireless and Perusahaan Perseroan

Can any of the company-specific risk be diversified away by investing in both Infrastrutture Wireless and Perusahaan Perseroan 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 Infrastrutture Wireless and Perusahaan Perseroan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infrastrutture Wireless Italiane and Perusahaan Perseroan PT, you can compare the effects of market volatilities on Infrastrutture Wireless and Perusahaan Perseroan 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 Infrastrutture Wireless with a short position of Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infrastrutture Wireless and Perusahaan Perseroan.

Diversification Opportunities for Infrastrutture Wireless and Perusahaan Perseroan

0.6

Correlation Coefficient

Infrastrutture Wireless  Perusahaan Perseroan

Poor diversification

The 3 months correlation between Infrastrutture and Perusahaan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan and Infrastrutture Wireless 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 Infrastrutture Wireless Italiane are associated (or correlated) with Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of Infrastrutture Wireless i.e., Infrastrutture Wireless and Perusahaan Perseroan go up and down completely randomly.

Pair Corralation between Infrastrutture Wireless and Perusahaan Perseroan

Assuming the 90 days horizon Infrastrutture Wireless Italiane is expected to generate 0.77 times more return on investment than Perusahaan Perseroan. However, Infrastrutture Wireless Italiane is 1.3 times less risky than Perusahaan Perseroan. It trades about -0.03 of its potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about -0.15 per unit of risk. If you would invest  974.00  in Infrastrutture Wireless Italiane on December 26, 2024 and sell it today you would lose (31.00) from holding Infrastrutture Wireless Italiane or give up 3.18% of portfolio value over 90 days.

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

Infrastrutture Wireless Italia  vs.  Perusahaan Perseroan PT

Infrastrutture Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infrastrutture Wireless Italiane has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Infrastrutture Wireless is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Perusahaan Perseroan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Infrastrutture Wireless and Perusahaan Perseroan

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

The idea behind Infrastrutture Wireless Italiane and Perusahaan Perseroan PT 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.