Correlation Between PT Data and Indointernet Tbk

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

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

Diversification Opportunities for PT Data and Indointernet Tbk

-0.22

Correlation Coefficient

PT Data  Indointernet Tbk

Very good diversification

The 3 months correlation between ELIT and Indointernet is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and Indointernet Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indointernet Tbk and PT 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 PT Data Sinergitama are associated (or correlated) with Indointernet Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indointernet Tbk has no effect on the direction of PT Data i.e., PT Data and Indointernet Tbk go up and down completely randomly.

Pair Corralation between PT Data and Indointernet Tbk

Assuming the 90 days trading horizon PT Data is expected to generate 1.52 times less return on investment than Indointernet Tbk. But when comparing it to its historical volatility, PT Data Sinergitama is 1.31 times less risky than Indointernet Tbk. It trades about 0.02 of its potential returns per unit of risk. Indointernet Tbk PT is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  387,000  in Indointernet Tbk PT on September 3, 2024 and sell it today you would earn a total of  10,000  from holding Indointernet Tbk PT or generate 2.58% return on investment over 90 days.

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

PT Data Sinergitama  vs.  Indointernet Tbk PT

PT Data Sinergitama

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Data Sinergitama are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, PT Data is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Indointernet Tbk

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Indointernet Tbk PT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Indointernet Tbk may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PT Data and Indointernet Tbk

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

The idea behind PT Data Sinergitama and Indointernet Tbk 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.