Correlation Between Alumindo Light and Indointernet Tbk

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

By analyzing existing cross correlation between Alumindo Light Metal and Indointernet Tbk PT, you can compare the effects of market volatilities on Alumindo Light and Indointernet Tbk 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 Alumindo Light with a short position of Indointernet Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumindo Light and Indointernet Tbk.

Diversification Opportunities for Alumindo Light and Indointernet Tbk

0.0

Correlation Coefficient

Alumindo Light  Indointernet Tbk

Pay attention - limited upside

The 3 months correlation between Alumindo and Indointernet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alumindo Light Metal and Indointernet Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indointernet Tbk and Alumindo Light 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 Alumindo Light Metal are associated (or correlated) with Indointernet Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indointernet Tbk has no effect on the direction of Alumindo Light i.e., Alumindo Light and Indointernet Tbk go up and down completely randomly.

Pair Corralation between Alumindo Light and Indointernet Tbk

If you would invest  375,000  in Indointernet Tbk PT on April 5, 2025 and sell it today you would earn a total of  2,000  from holding Indointernet Tbk PT or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alumindo Light Metal  vs.  Indointernet Tbk PT

Alumindo Light Metal

Risk-Adjusted Performance

Very Weak

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

Indointernet Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Indointernet Tbk PT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Indointernet Tbk 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 Alumindo Light and Indointernet Tbk

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

The idea behind Alumindo Light Metal and Indointernet Tbk PT 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.