Correlation Between Alakasa Industrindo and Surya Semesta
Can any of the company-specific risk be diversified away by investing in both Alakasa Industrindo and Surya Semesta 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 Alakasa Industrindo and Surya Semesta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alakasa Industrindo Tbk and Surya Semesta Internusa, you can compare the effects of market volatilities on Alakasa Industrindo and Surya Semesta 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 Alakasa Industrindo with a short position of Surya Semesta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alakasa Industrindo and Surya Semesta.
Diversification Opportunities for Alakasa Industrindo and Surya Semesta
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alakasa and Surya is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alakasa Industrindo Tbk and Surya Semesta Internusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Semesta Internusa and Alakasa Industrindo 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 Alakasa Industrindo Tbk are associated (or correlated) with Surya Semesta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Semesta Internusa has no effect on the direction of Alakasa Industrindo i.e., Alakasa Industrindo and Surya Semesta go up and down completely randomly.
Pair Corralation between Alakasa Industrindo and Surya Semesta
Assuming the 90 days trading horizon Alakasa Industrindo Tbk is expected to generate 1.19 times more return on investment than Surya Semesta. However, Alakasa Industrindo is 1.19 times more volatile than Surya Semesta Internusa. It trades about -0.03 of its potential returns per unit of risk. Surya Semesta Internusa is currently generating about -0.23 per unit of risk. If you would invest 35,400 in Alakasa Industrindo Tbk on November 3, 2024 and sell it today you would lose (1,000.00) from holding Alakasa Industrindo Tbk or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alakasa Industrindo Tbk vs. Surya Semesta Internusa
Performance |
| Timeline |
| Alakasa Industrindo Tbk |
| Surya Semesta Internusa |
Alakasa Industrindo and Surya Semesta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alakasa Industrindo and Surya Semesta
The main advantage of trading using opposite Alakasa Industrindo and Surya Semesta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alakasa Industrindo position performs unexpectedly, Surya Semesta 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 Surya Semesta will offset losses from the drop in Surya Semesta's long position.| Alakasa Industrindo vs. Argha Karya Prima | Alakasa Industrindo vs. Alumindo Light Metal | Alakasa Industrindo vs. Asiaplast Industries Tbk | Alakasa Industrindo vs. Akbar Indomakmur Stimec |
| Surya Semesta vs. Summarecon Agung Tbk | Surya Semesta vs. Lippo Cikarang Tbk | Surya Semesta vs. Alam Sutera Realty | Surya Semesta vs. Lippo Karawaci 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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