Correlation Between Intanwijaya Internasional and Alumindo Light
Can any of the company-specific risk be diversified away by investing in both Intanwijaya Internasional and Alumindo Light 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 Intanwijaya Internasional and Alumindo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intanwijaya Internasional Tbk and Alumindo Light Metal, you can compare the effects of market volatilities on Intanwijaya Internasional and Alumindo Light 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 Intanwijaya Internasional with a short position of Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intanwijaya Internasional and Alumindo Light.
Diversification Opportunities for Intanwijaya Internasional and Alumindo Light
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intanwijaya and Alumindo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Intanwijaya Internasional Tbk and Alumindo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumindo Light Metal and Intanwijaya Internasional 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 Intanwijaya Internasional Tbk are associated (or correlated) with Alumindo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumindo Light Metal has no effect on the direction of Intanwijaya Internasional i.e., Intanwijaya Internasional and Alumindo Light go up and down completely randomly.
Pair Corralation between Intanwijaya Internasional and Alumindo Light
Assuming the 90 days trading horizon Intanwijaya Internasional Tbk is expected to under-perform the Alumindo Light. But the stock apears to be less risky and, when comparing its historical volatility, Intanwijaya Internasional Tbk is 1.98 times less risky than Alumindo Light. The stock trades about -0.05 of its potential returns per unit of risk. The Alumindo Light Metal is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,000 in Alumindo Light Metal on September 25, 2024 and sell it today you would earn a total of 400.00 from holding Alumindo Light Metal or generate 5.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Intanwijaya Internasional Tbk vs. Alumindo Light Metal
Performance |
Timeline |
Intanwijaya Internasional |
Alumindo Light Metal |
Intanwijaya Internasional and Alumindo Light Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Intanwijaya Internasional and Alumindo Light
The main advantage of trading using opposite Intanwijaya Internasional and Alumindo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intanwijaya Internasional position performs unexpectedly, Alumindo Light 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 Alumindo Light will offset losses from the drop in Alumindo Light's long position.Intanwijaya Internasional vs. Asiaplast Industries Tbk | Intanwijaya Internasional vs. Trias Sentosa Tbk | Intanwijaya Internasional vs. Lotte Chemical Titan |
Alumindo Light vs. Intanwijaya Internasional Tbk | Alumindo Light vs. Asiaplast Industries Tbk | Alumindo Light vs. Trias Sentosa Tbk | Alumindo Light vs. Lotte Chemical Titan |
Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |