Correlation Between Sumber Alfaria and Modern Internasional
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Modern Internasional 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 Modern Internasional 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 Modern Internasional Tbk, you can compare the effects of market volatilities on Sumber Alfaria and Modern Internasional 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 Modern Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Modern Internasional.
Diversification Opportunities for Sumber Alfaria and Modern Internasional
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sumber and Modern is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Modern Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modern Internasional Tbk 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 Modern Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modern Internasional Tbk has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Modern Internasional go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Modern Internasional
Assuming the 90 days trading horizon Sumber Alfaria Trijaya is expected to generate 0.25 times more return on investment than Modern Internasional. However, Sumber Alfaria Trijaya is 4.08 times less risky than Modern Internasional. It trades about 0.03 of its potential returns per unit of risk. Modern Internasional Tbk is currently generating about -0.02 per unit of risk. If you would invest 255,151 in Sumber Alfaria Trijaya on September 12, 2024 and sell it today you would earn a total of 46,849 from holding Sumber Alfaria Trijaya or generate 18.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sumber Alfaria Trijaya vs. Modern Internasional Tbk
Performance |
| Timeline |
| Sumber Alfaria Trijaya |
| Modern Internasional Tbk |
Sumber Alfaria and Modern Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Alfaria and Modern Internasional
The main advantage of trading using opposite Sumber Alfaria and Modern Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Modern Internasional 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 Modern Internasional will offset losses from the drop in Modern Internasional'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 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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