Correlation Between Tera Data and PT Pelayaran

Can any of the company-specific risk be diversified away by investing in both Tera Data and PT Pelayaran 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 Tera Data and PT Pelayaran into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tera Data Indonusa and PT Pelayaran Tamarin, you can compare the effects of market volatilities on Tera Data and PT Pelayaran 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 Tera Data with a short position of PT Pelayaran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tera Data and PT Pelayaran.

Diversification Opportunities for Tera Data and PT Pelayaran

0.57

Correlation Coefficient

Tera Data  PT Pelayaran

Very weak diversification

The 3 months correlation between Tera and TAMU is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tera Data Indonusa and PT Pelayaran Tamarin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Pelayaran Tamarin and Tera Data 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 Tera Data Indonusa are associated (or correlated) with PT Pelayaran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Pelayaran Tamarin has no effect on the direction of Tera Data i.e., Tera Data and PT Pelayaran go up and down completely randomly.

Pair Corralation between Tera Data and PT Pelayaran

Assuming the 90 days trading horizon Tera Data is expected to generate 4.2 times less return on investment than PT Pelayaran. But when comparing it to its historical volatility, Tera Data Indonusa is 2.8 times less risky than PT Pelayaran. It trades about 0.15 of its potential returns per unit of risk. PT Pelayaran Tamarin is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,400  in PT Pelayaran Tamarin on September 4, 2024 and sell it today you would earn a total of  300.00  from holding PT Pelayaran Tamarin or generate 21.43% return on investment over 90 days.

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

Tera Data Indonusa  vs.  PT Pelayaran Tamarin

Tera Data Indonusa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tera Data Indonusa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

PT Pelayaran Tamarin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Pelayaran Tamarin 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 Tera Data and PT Pelayaran

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

The idea behind Tera Data Indonusa and PT Pelayaran Tamarin 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.