Correlation Between Sumber Alfaria and Asuransi Dayin
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Asuransi Dayin 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 Sumber Alfaria and Asuransi Dayin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Alfaria Trijaya and Asuransi Dayin Mitra, you can compare the effects of market volatilities on Sumber Alfaria and Asuransi Dayin 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 Sumber Alfaria with a short position of Asuransi Dayin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Asuransi Dayin.
Diversification Opportunities for Sumber Alfaria and Asuransi Dayin
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumber and Asuransi is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Asuransi Dayin Mitra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Dayin Mitra and Sumber Alfaria 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 Sumber Alfaria Trijaya are associated (or correlated) with Asuransi Dayin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Dayin Mitra has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Asuransi Dayin go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Asuransi Dayin
Assuming the 90 days trading horizon Sumber Alfaria Trijaya is expected to generate 3.69 times more return on investment than Asuransi Dayin. However, Sumber Alfaria is 3.69 times more volatile than Asuransi Dayin Mitra. It trades about 0.03 of its potential returns per unit of risk. Asuransi Dayin Mitra is currently generating about 0.04 per unit of risk. If you would invest 286,000 in Sumber Alfaria Trijaya on November 5, 2024 and sell it today you would earn a total of 2,000 from holding Sumber Alfaria Trijaya or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumber Alfaria Trijaya vs. Asuransi Dayin Mitra
Performance |
| Timeline |
| Sumber Alfaria Trijaya |
| Asuransi Dayin Mitra |
Sumber Alfaria and Asuransi Dayin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Alfaria and Asuransi Dayin
The main advantage of trading using opposite Sumber Alfaria and Asuransi Dayin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Asuransi Dayin 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 Asuransi Dayin will offset losses from the drop in Asuransi Dayin's long position.| Sumber Alfaria vs. Elang Mahkota Teknologi | Sumber Alfaria vs. Ace Hardware Indonesia | Sumber Alfaria vs. BFI Finance Indonesia | Sumber Alfaria vs. Tower Bersama Infrastructure |
| Asuransi Dayin vs. Asuransi Bintang Tbk | Asuransi Dayin vs. Asuransi Bina Dana | Asuransi Dayin vs. Asuransi Ramayana Tbk | Asuransi Dayin vs. Asuransi Harta Aman |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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