Correlation Between Akr Corporindo and Smartfren Telecom
Can any of the company-specific risk be diversified away by investing in both Akr Corporindo and Smartfren Telecom 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 Akr Corporindo and Smartfren Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akr Corporindo Tbk and Smartfren Telecom Tbk, you can compare the effects of market volatilities on Akr Corporindo and Smartfren Telecom 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 Akr Corporindo with a short position of Smartfren Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akr Corporindo and Smartfren Telecom.
Diversification Opportunities for Akr Corporindo and Smartfren Telecom
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Akr and Smartfren is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Akr Corporindo Tbk and Smartfren Telecom Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartfren Telecom Tbk and Akr Corporindo 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 Akr Corporindo Tbk are associated (or correlated) with Smartfren Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartfren Telecom Tbk has no effect on the direction of Akr Corporindo i.e., Akr Corporindo and Smartfren Telecom go up and down completely randomly.
Pair Corralation between Akr Corporindo and Smartfren Telecom
Assuming the 90 days trading horizon Akr Corporindo Tbk is expected to generate 0.98 times more return on investment than Smartfren Telecom. However, Akr Corporindo Tbk is 1.02 times less risky than Smartfren Telecom. It trades about -0.07 of its potential returns per unit of risk. Smartfren Telecom Tbk is currently generating about -0.11 per unit of risk. If you would invest 141,000 in Akr Corporindo Tbk on October 25, 2024 and sell it today you would lose (18,000) from holding Akr Corporindo Tbk or give up 12.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.33% |
| Values | Daily Returns |
Akr Corporindo Tbk vs. Smartfren Telecom Tbk
Performance |
| Timeline |
| Akr Corporindo Tbk |
| Smartfren Telecom Tbk |
Akr Corporindo and Smartfren Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akr Corporindo and Smartfren Telecom
The main advantage of trading using opposite Akr Corporindo and Smartfren Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akr Corporindo position performs unexpectedly, Smartfren Telecom 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 Smartfren Telecom will offset losses from the drop in Smartfren Telecom's long position.| Akr Corporindo vs. Charoen Pokphand Indonesia | Akr Corporindo vs. Indocement Tunggal Prakarsa | Akr Corporindo vs. Bumi Serpong Damai | Akr Corporindo vs. Jasa Marga Tbk |
| Smartfren Telecom vs. Media Nusantara Citra | Smartfren Telecom vs. Matahari Department Store | Smartfren Telecom vs. Akr Corporindo Tbk | Smartfren Telecom vs. XL Axiata 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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