Correlation Between Indosat Tbk and Graha Layar

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

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

Diversification Opportunities for Indosat Tbk and Graha Layar

-0.67

Correlation Coefficient

Indosat Tbk  Graha Layar

Excellent diversification

The 3 months correlation between Indosat and Graha is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Graha Layar Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graha Layar Prima and Indosat Tbk 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 Indosat Tbk are associated (or correlated) with Graha Layar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graha Layar Prima has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Graha Layar go up and down completely randomly.

Pair Corralation between Indosat Tbk and Graha Layar

Assuming the 90 days trading horizon Indosat Tbk is expected to under-perform the Graha Layar. In addition to that, Indosat Tbk is 7.1 times more volatile than Graha Layar Prima. It trades about -0.13 of its total potential returns per unit of risk. Graha Layar Prima is currently generating about 0.1 per unit of volatility. If you would invest  184,000  in Graha Layar Prima on September 5, 2024 and sell it today you would earn a total of  16,000  from holding Graha Layar Prima or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Indosat Tbk  vs.  Graha Layar Prima

Indosat Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indosat 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.

Graha Layar Prima

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Graha Layar Prima are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Graha Layar may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Indosat Tbk and Graha Layar

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

The idea behind Indosat Tbk and Graha Layar Prima 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.