Correlation Between PT Indosat and Hyster Yale

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

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

Diversification Opportunities for PT Indosat and Hyster Yale

0.28

Correlation Coefficient

PT Indosat  Hyster Yale

Modest diversification

The 3 months correlation between IDO1 and Hyster is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding PT Indosat Tbk and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials and PT Indosat 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 Indosat Tbk are associated (or correlated) with Hyster Yale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of PT Indosat i.e., PT Indosat and Hyster Yale go up and down completely randomly.

Pair Corralation between PT Indosat and Hyster Yale

Assuming the 90 days trading horizon PT Indosat Tbk is expected to generate 3.25 times more return on investment than Hyster Yale. However, PT Indosat is 3.25 times more volatile than Hyster Yale Materials Handling. It trades about 0.01 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about -0.07 per unit of risk. If you would invest  16.00  in PT Indosat Tbk on September 28, 2024 and sell it today you would lose (3.00) from holding PT Indosat Tbk or give up 18.75% of portfolio value over 90 days.

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

PT Indosat Tbk  vs.  Hyster Yale Materials Handling

PT Indosat Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Indosat Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PT Indosat may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hyster Yale Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hyster Yale Materials Handling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with PT Indosat and Hyster Yale

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

The idea behind PT Indosat Tbk and Hyster Yale Materials Handling 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.