Correlation Between Sumber Alfaria and Cisarua Mountain
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Cisarua Mountain 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 Cisarua Mountain 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 Cisarua Mountain Dairy, you can compare the effects of market volatilities on Sumber Alfaria and Cisarua Mountain 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 Cisarua Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Cisarua Mountain.
Diversification Opportunities for Sumber Alfaria and Cisarua Mountain
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sumber and Cisarua is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Cisarua Mountain Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisarua Mountain Dairy 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 Cisarua Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisarua Mountain Dairy has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Cisarua Mountain go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Cisarua Mountain
Assuming the 90 days trading horizon Sumber Alfaria Trijaya is expected to under-perform the Cisarua Mountain. But the stock apears to be less risky and, when comparing its historical volatility, Sumber Alfaria Trijaya is 1.09 times less risky than Cisarua Mountain. The stock trades about -0.15 of its potential returns per unit of risk. The Cisarua Mountain Dairy is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 537,500 in Cisarua Mountain Dairy on August 25, 2024 and sell it today you would lose (7,500) from holding Cisarua Mountain Dairy or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumber Alfaria Trijaya vs. Cisarua Mountain Dairy
Performance |
| Timeline |
| Sumber Alfaria Trijaya |
| Cisarua Mountain Dairy |
Sumber Alfaria and Cisarua Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Alfaria and Cisarua Mountain
The main advantage of trading using opposite Sumber Alfaria and Cisarua Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Cisarua Mountain 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 Cisarua Mountain will offset losses from the drop in Cisarua Mountain's long position.| Sumber Alfaria vs. Charoen Pokphand Indonesia | Sumber Alfaria vs. Kalbe Farma Tbk | Sumber Alfaria vs. Indofood Cbp Sukses | Sumber Alfaria vs. Akr Corporindo Tbk |
| Cisarua Mountain vs. Avia Avian PT | Cisarua Mountain vs. Medikaloka Hermina PT | Cisarua Mountain vs. Dayamitra Telekomunikasi PT | Cisarua Mountain vs. Sumber Alfaria Trijaya |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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