Correlation Between PT Techno9 and Indosterling Technomedia

Can any of the company-specific risk be diversified away by investing in both PT Techno9 and Indosterling Technomedia 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 Techno9 and Indosterling Technomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Techno9 Indonesia and Indosterling Technomedia Tbk, you can compare the effects of market volatilities on PT Techno9 and Indosterling Technomedia 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 Techno9 with a short position of Indosterling Technomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Techno9 and Indosterling Technomedia.

Diversification Opportunities for PT Techno9 and Indosterling Technomedia

0.0

Correlation Coefficient

PT Techno9  Indosterling Technomedia

Pay attention - limited upside

The 3 months correlation between NINE and Indosterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Techno9 Indonesia and Indosterling Technomedia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosterling Technomedia and PT Techno9 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 Techno9 Indonesia are associated (or correlated) with Indosterling Technomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosterling Technomedia has no effect on the direction of PT Techno9 i.e., PT Techno9 and Indosterling Technomedia go up and down completely randomly.

Pair Corralation between PT Techno9 and Indosterling Technomedia

If you would invest  700.00  in PT Techno9 Indonesia on September 3, 2024 and sell it today you would earn a total of  3,500  from holding PT Techno9 Indonesia or generate 500.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

PT Techno9 Indonesia  vs.  Indosterling Technomedia Tbk

PT Techno9 Indonesia

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in PT Techno9 Indonesia are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Techno9 disclosed solid returns over the last few months and may actually be approaching a breakup point.

Indosterling Technomedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indosterling Technomedia Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Indosterling Technomedia is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with PT Techno9 and Indosterling Technomedia

The main advantage of trading using opposite PT Techno9 and Indosterling Technomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Techno9 position performs unexpectedly, Indosterling Technomedia 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 Indosterling Technomedia will offset losses from the drop in Indosterling Technomedia's long position.

The idea behind PT Techno9 Indonesia and Indosterling Technomedia 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..