Correlation Between Akr Corporindo and Sawit Sumbermas
Can any of the company-specific risk be diversified away by investing in both Akr Corporindo and Sawit Sumbermas 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 Sawit Sumbermas 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 Sawit Sumbermas Sarana, you can compare the effects of market volatilities on Akr Corporindo and Sawit Sumbermas 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 Sawit Sumbermas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akr Corporindo and Sawit Sumbermas.
Diversification Opportunities for Akr Corporindo and Sawit Sumbermas
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Akr and Sawit is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Akr Corporindo Tbk and Sawit Sumbermas Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sawit Sumbermas Sarana 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 Sawit Sumbermas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sawit Sumbermas Sarana has no effect on the direction of Akr Corporindo i.e., Akr Corporindo and Sawit Sumbermas go up and down completely randomly.
Pair Corralation between Akr Corporindo and Sawit Sumbermas
Assuming the 90 days trading horizon Akr Corporindo Tbk is expected to generate 1.42 times more return on investment than Sawit Sumbermas. However, Akr Corporindo is 1.42 times more volatile than Sawit Sumbermas Sarana. It trades about -0.16 of its potential returns per unit of risk. Sawit Sumbermas Sarana is currently generating about -0.28 per unit of risk. If you would invest 144,000 in Akr Corporindo Tbk on August 24, 2024 and sell it today you would lose (14,000) from holding Akr Corporindo Tbk or give up 9.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akr Corporindo Tbk vs. Sawit Sumbermas Sarana
Performance |
| Timeline |
| Akr Corporindo Tbk |
| Sawit Sumbermas Sarana |
Akr Corporindo and Sawit Sumbermas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akr Corporindo and Sawit Sumbermas
The main advantage of trading using opposite Akr Corporindo and Sawit Sumbermas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akr Corporindo position performs unexpectedly, Sawit Sumbermas 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 Sawit Sumbermas will offset losses from the drop in Sawit Sumbermas' long position.| Akr Corporindo vs. Samudera Indonesia Tbk | Akr Corporindo vs. Steady Safe TBK | Akr Corporindo vs. Rukun Raharja Tbk | Akr Corporindo vs. PT Temas Tbk |
| Sawit Sumbermas vs. Charoen Pokphand Indonesia | Sawit Sumbermas vs. Kalbe Farma Tbk | Sawit Sumbermas vs. Indofood Cbp Sukses | Sawit Sumbermas vs. PT Indofood Sukses |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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