Correlation Between Trias Sentosa and Intanwijaya Internasional

Can any of the company-specific risk be diversified away by investing in both Trias Sentosa and Intanwijaya Internasional 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 Trias Sentosa and Intanwijaya Internasional into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Trias Sentosa and Intanwijaya Internasional

-0.24

Correlation Coefficient

Trias Sentosa  Intanwijaya Internasional

Very good diversification

The 3 months correlation between Trias and Intanwijaya is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa Tbk and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional and Trias Sentosa 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 Trias Sentosa Tbk are associated (or correlated) with Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Trias Sentosa i.e., Trias Sentosa and Intanwijaya Internasional go up and down completely randomly.

Pair Corralation between Trias Sentosa and Intanwijaya Internasional

Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to under-perform the Intanwijaya Internasional. But the stock apears to be less risky and, when comparing its historical volatility, Trias Sentosa Tbk is 1.22 times less risky than Intanwijaya Internasional. The stock trades about -0.11 of its potential returns per unit of risk. The Intanwijaya Internasional Tbk is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  57,500  in Intanwijaya Internasional Tbk on September 26, 2024 and sell it today you would lose (500.00) from holding Intanwijaya Internasional Tbk or give up 0.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Trias Sentosa Tbk  vs.  Intanwijaya Internasional Tbk

Trias Sentosa Tbk

Risk-Adjusted Performance

0 of 100

Weak

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

Intanwijaya Internasional

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intanwijaya Internasional Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Intanwijaya Internasional 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 Trias Sentosa and Intanwijaya Internasional

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

The idea behind Trias Sentosa Tbk and Intanwijaya Internasional 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.