Correlation Between Titan Company and Yulie Sekurindo

Can any of the company-specific risk be diversified away by investing in both Titan Company and Yulie Sekurindo 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 Titan Company and Yulie Sekurindo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Titan Company Limited and Yulie Sekurindo Tbk, you can compare the effects of market volatilities on Titan Company and Yulie Sekurindo 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 Titan Company with a short position of Yulie Sekurindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Company and Yulie Sekurindo.

Diversification Opportunities for Titan Company and Yulie Sekurindo

0.02

Correlation Coefficient

Titan Company  Yulie Sekurindo

Significant diversification

The 3 months correlation between Titan and Yulie is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Titan Company Limited and Yulie Sekurindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulie Sekurindo Tbk and Titan Company 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 Titan Company Limited are associated (or correlated) with Yulie Sekurindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulie Sekurindo Tbk has no effect on the direction of Titan Company i.e., Titan Company and Yulie Sekurindo go up and down completely randomly.

Pair Corralation between Titan Company and Yulie Sekurindo

Assuming the 90 days trading horizon Titan Company Limited is expected to under-perform the Yulie Sekurindo. In addition to that, Titan Company is 1.34 times more volatile than Yulie Sekurindo Tbk. It trades about -0.13 of its total potential returns per unit of risk. Yulie Sekurindo Tbk is currently generating about -0.07 per unit of volatility. If you would invest  251,000  in Yulie Sekurindo Tbk on September 5, 2024 and sell it today you would lose (11,000) from holding Yulie Sekurindo Tbk or give up 4.38% of portfolio value over 90 days.

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

Titan Company Limited  vs.  Yulie Sekurindo Tbk

Titan Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Titan Company Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Yulie Sekurindo Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yulie Sekurindo Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Yulie Sekurindo 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 Titan Company and Yulie Sekurindo

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

The idea behind Titan Company Limited and Yulie Sekurindo 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.

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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.