Correlation Between Link Net and PT Pelayaran

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

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

Diversification Opportunities for Link Net and PT Pelayaran

0.69

Correlation Coefficient

Link Net  PT Pelayaran

Poor diversification

The 3 months correlation between Link and TAMU is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Link Net Tbk and PT Pelayaran Tamarin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Pelayaran Tamarin and Link Net 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 Link Net Tbk are associated (or correlated) with PT Pelayaran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Pelayaran Tamarin has no effect on the direction of Link Net i.e., Link Net and PT Pelayaran go up and down completely randomly.

Pair Corralation between Link Net and PT Pelayaran

If you would invest  700.00  in PT Pelayaran Tamarin on February 4, 2024 and sell it today you would earn a total of  0.00  from holding PT Pelayaran Tamarin or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.75%
Values	Daily Returns

Link Net Tbk  vs.  PT Pelayaran Tamarin

Link Net Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Link Net Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

PT Pelayaran Tamarin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Pelayaran Tamarin 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 basic indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Link Net and PT Pelayaran

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

The idea behind Link Net Tbk and PT Pelayaran Tamarin 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.