Correlation Between Indosat Tbk and Hanjaya Mandala
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Hanjaya Mandala 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 Indosat Tbk and Hanjaya Mandala into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Hanjaya Mandala Sampoerna, you can compare the effects of market volatilities on Indosat Tbk and Hanjaya Mandala 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 Indosat Tbk with a short position of Hanjaya Mandala. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Hanjaya Mandala.
Diversification Opportunities for Indosat Tbk and Hanjaya Mandala
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indosat and Hanjaya is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Hanjaya Mandala Sampoerna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjaya Mandala Sampoerna and Indosat Tbk 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 Indosat Tbk are associated (or correlated) with Hanjaya Mandala. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjaya Mandala Sampoerna has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Hanjaya Mandala go up and down completely randomly.
Pair Corralation between Indosat Tbk and Hanjaya Mandala
Assuming the 90 days trading horizon Indosat Tbk is expected to under-perform the Hanjaya Mandala. In addition to that, Indosat Tbk is 1.79 times more volatile than Hanjaya Mandala Sampoerna. It trades about -0.08 of its total potential returns per unit of risk. Hanjaya Mandala Sampoerna is currently generating about 0.0 per unit of volatility. If you would invest 78,111 in Hanjaya Mandala Sampoerna on February 4, 2024 and sell it today you would lose (111.00) from holding Hanjaya Mandala Sampoerna or give up 0.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Indosat Tbk vs. Hanjaya Mandala Sampoerna
Performance |
Timeline |
Indosat Tbk |
Hanjaya Mandala Sampoerna |
Indosat Tbk and Hanjaya Mandala Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Indosat Tbk and Hanjaya Mandala
The main advantage of trading using opposite Indosat Tbk and Hanjaya Mandala positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Hanjaya Mandala 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 Hanjaya Mandala will offset losses from the drop in Hanjaya Mandala's long position.Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
Hanjaya Mandala vs. Perusahaan Perkebunan London | Hanjaya Mandala vs. United Tractors Tbk | Hanjaya Mandala vs. Vale Indonesia Tbk | Hanjaya Mandala vs. Astra International Tbk |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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