Correlation Between Fortune Mate and Intiland Development

Can any of the company-specific risk be diversified away by investing in both Fortune Mate and Intiland Development 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 Fortune Mate and Intiland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fortune Mate Indonesia and Intiland Development Tbk, you can compare the effects of market volatilities on Fortune Mate and Intiland Development 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 Fortune Mate with a short position of Intiland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Mate and Intiland Development.

Diversification Opportunities for Fortune Mate and Intiland Development

-0.83

Correlation Coefficient

Fortune Mate  Intiland Development

Pay attention - limited upside

The 3 months correlation between Fortune and Intiland is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Mate Indonesia and Intiland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intiland Development Tbk and Fortune Mate 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 Fortune Mate Indonesia are associated (or correlated) with Intiland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intiland Development Tbk has no effect on the direction of Fortune Mate i.e., Fortune Mate and Intiland Development go up and down completely randomly.

Pair Corralation between Fortune Mate and Intiland Development

Assuming the 90 days trading horizon Fortune Mate Indonesia is expected to generate 4.35 times more return on investment than Intiland Development. However, Fortune Mate is 4.35 times more volatile than Intiland Development Tbk. It trades about 0.22 of its potential returns per unit of risk. Intiland Development Tbk is currently generating about -0.24 per unit of risk. If you would invest  23,600  in Fortune Mate Indonesia on September 14, 2024 and sell it today you would earn a total of  30,900  from holding Fortune Mate Indonesia or generate 130.93% return on investment over 90 days.

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

Fortune Mate Indonesia  vs.  Intiland Development Tbk

Fortune Mate Indonesia

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fortune Mate Indonesia are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Fortune Mate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Intiland Development Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intiland Development 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 Fortune Mate and Intiland Development

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

The idea behind Fortune Mate Indonesia and Intiland Development 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.