Correlation Between Sumber Alfaria and Centratama Telekomunikasi
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Centratama Telekomunikasi 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 Centratama Telekomunikasi 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 Centratama Telekomunikasi Ind, you can compare the effects of market volatilities on Sumber Alfaria and Centratama Telekomunikasi 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 Centratama Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Centratama Telekomunikasi.
Diversification Opportunities for Sumber Alfaria and Centratama Telekomunikasi
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumber and Centratama is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Centratama Telekomunikasi Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centratama Telekomunikasi 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 Centratama Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centratama Telekomunikasi has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Centratama Telekomunikasi go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Centratama Telekomunikasi
Assuming the 90 days trading horizon Sumber Alfaria Trijaya is expected to generate 0.85 times more return on investment than Centratama Telekomunikasi. However, Sumber Alfaria Trijaya is 1.18 times less risky than Centratama Telekomunikasi. It trades about -0.39 of its potential returns per unit of risk. Centratama Telekomunikasi Ind is currently generating about -0.35 per unit of risk. If you would invest 357,000 in Sumber Alfaria Trijaya on August 29, 2024 and sell it today you would lose (66,000) from holding Sumber Alfaria Trijaya or give up 18.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumber Alfaria Trijaya vs. Centratama Telekomunikasi Ind
Performance |
| Timeline |
| Sumber Alfaria Trijaya |
| Centratama Telekomunikasi |
Sumber Alfaria and Centratama Telekomunikasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Alfaria and Centratama Telekomunikasi
The main advantage of trading using opposite Sumber Alfaria and Centratama Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Centratama Telekomunikasi 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 Centratama Telekomunikasi will offset losses from the drop in Centratama Telekomunikasi'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 |
| Centratama Telekomunikasi vs. Bank Artos Indonesia | Centratama Telekomunikasi vs. PT Bukalapak | Centratama Telekomunikasi vs. Sumber Alfaria Trijaya | Centratama Telekomunikasi vs. Merdeka Copper Gold |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |