Correlation Between Alkindo Naratama and Apple
Can any of the company-specific risk be diversified away by investing in both Alkindo Naratama and Apple 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 Alkindo Naratama and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkindo Naratama Tbk and Apple Inc, you can compare the effects of market volatilities on Alkindo Naratama and Apple 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 Alkindo Naratama with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkindo Naratama and Apple.
Diversification Opportunities for Alkindo Naratama and Apple
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alkindo and Apple is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Alkindo Naratama Tbk and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Alkindo Naratama 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 Alkindo Naratama Tbk are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Alkindo Naratama i.e., Alkindo Naratama and Apple go up and down completely randomly.
Pair Corralation between Alkindo Naratama and Apple
Assuming the 90 days trading horizon Alkindo Naratama Tbk is expected to generate 3.39 times more return on investment than Apple. However, Alkindo Naratama is 3.39 times more volatile than Apple Inc. It trades about 0.11 of its potential returns per unit of risk. Apple Inc is currently generating about -0.1 per unit of risk. If you would invest 81,000 in Alkindo Naratama Tbk on January 24, 2024 and sell it today you would earn a total of 5,000 from holding Alkindo Naratama Tbk or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 70.0% |
| Values | Daily Returns |
Alkindo Naratama Tbk vs. Apple Inc
Performance |
| Timeline |
| Alkindo Naratama Tbk |
| Apple Inc |
Alkindo Naratama and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkindo Naratama and Apple
The main advantage of trading using opposite Alkindo Naratama and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkindo Naratama position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Alkindo Naratama vs. Argha Karya Prima | Alkindo Naratama vs. Gunawan Dianjaya Steel | Alkindo Naratama vs. Arwana Citramulia Tbk | Alkindo Naratama vs. Alakasa Industrindo 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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