Correlation Between PT Indo and Transurban

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

By analyzing existing cross correlation between PT Indo Tambangraya and Transurban Group, you can compare the effects of market volatilities on PT Indo and Transurban 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 PT Indo with a short position of Transurban. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indo and Transurban.

Diversification Opportunities for PT Indo and Transurban

0.44

Correlation Coefficient

PT Indo  Transurban

Very weak diversification

The 3 months correlation between 3IB and Transurban is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding PT Indo Tambangraya and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group and PT Indo 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 PT Indo Tambangraya are associated (or correlated) with Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of PT Indo i.e., PT Indo and Transurban go up and down completely randomly.

Pair Corralation between PT Indo and Transurban

Assuming the 90 days trading horizon PT Indo Tambangraya is expected to generate 3.43 times more return on investment than Transurban. However, PT Indo is 3.43 times more volatile than Transurban Group. It trades about 0.03 of its potential returns per unit of risk. Transurban Group is currently generating about 0.04 per unit of risk. If you would invest  109.00  in PT Indo Tambangraya on April 20, 2025 and sell it today you would earn a total of  4.00  from holding PT Indo Tambangraya or generate 3.67% return on investment over 90 days.

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

PT Indo Tambangraya  vs.  Transurban Group

PT Indo Tambangraya

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Indo Tambangraya are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PT Indo may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Transurban Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transurban Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Transurban is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Indo and Transurban

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

The idea behind PT Indo Tambangraya and Transurban Group 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.