Correlation Between PT Homeco and Indo Oil
Can any of the company-specific risk be diversified away by investing in both PT Homeco and Indo Oil 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 Homeco and Indo Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Homeco Victoria and Indo Oil Perkasa, you can compare the effects of market volatilities on PT Homeco and Indo Oil 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 Homeco with a short position of Indo Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Homeco and Indo Oil.
Diversification Opportunities for PT Homeco and Indo Oil
Significant diversification
The 3 months correlation between LIVE and Indo is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PT Homeco Victoria and Indo Oil Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Oil Perkasa and PT Homeco 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 Homeco Victoria are associated (or correlated) with Indo Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Oil Perkasa has no effect on the direction of PT Homeco i.e., PT Homeco and Indo Oil go up and down completely randomly.
Pair Corralation between PT Homeco and Indo Oil
Assuming the 90 days trading horizon PT Homeco Victoria is expected to generate 3.02 times more return on investment than Indo Oil. However, PT Homeco is 3.02 times more volatile than Indo Oil Perkasa. It trades about 0.03 of its potential returns per unit of risk. Indo Oil Perkasa is currently generating about -0.03 per unit of risk. If you would invest 18,200 in PT Homeco Victoria on September 16, 2024 and sell it today you would earn a total of 500.00 from holding PT Homeco Victoria or generate 2.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PT Homeco Victoria vs. Indo Oil Perkasa
Performance |
Timeline |
PT Homeco Victoria |
Indo Oil Perkasa |
PT Homeco and Indo Oil Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Homeco and Indo Oil
The main advantage of trading using opposite PT Homeco and Indo Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Homeco position performs unexpectedly, Indo Oil 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 Indo Oil will offset losses from the drop in Indo Oil's long position.PT Homeco vs. Bank Central Asia | PT Homeco vs. Bank Rakyat Indonesia | PT Homeco vs. Bayan Resources Tbk | PT Homeco vs. Bank Mandiri Persero |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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