Correlation Between Integra Indocabinet and Acset Indonusa

Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Acset Indonusa 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 Integra Indocabinet and Acset Indonusa into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Integra Indocabinet and Acset Indonusa

-0.86

Correlation Coefficient

Integra Indocabinet  Acset Indonusa

Pay attention - limited upside

The 3 months correlation between Integra and Acset is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Acset Indonusa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acset Indonusa Tbk and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with Acset Indonusa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acset Indonusa Tbk has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Acset Indonusa go up and down completely randomly.

Pair Corralation between Integra Indocabinet and Acset Indonusa

Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to generate 2.82 times more return on investment than Acset Indonusa. However, Integra Indocabinet is 2.82 times more volatile than Acset Indonusa Tbk. It trades about 0.05 of its potential returns per unit of risk. Acset Indonusa Tbk is currently generating about -0.19 per unit of risk. If you would invest  30,200  in Integra Indocabinet Tbk on September 18, 2024 and sell it today you would earn a total of  800.00  from holding Integra Indocabinet Tbk or generate 2.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Integra Indocabinet Tbk  vs.  Acset Indonusa Tbk

Integra Indocabinet Tbk

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Indocabinet Tbk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Integra Indocabinet disclosed solid returns over the last few months and may actually be approaching a breakup point.

Acset Indonusa Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acset Indonusa 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.

Pair Trading with Integra Indocabinet and Acset Indonusa

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

The idea behind Integra Indocabinet Tbk and Acset Indonusa 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.