Correlation Between Sumber Alfaria and Sarana Meditama
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Sarana Meditama 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 Sarana Meditama 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 Sarana Meditama Metropolitan, you can compare the effects of market volatilities on Sumber Alfaria and Sarana Meditama 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 Sarana Meditama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Sarana Meditama.
Diversification Opportunities for Sumber Alfaria and Sarana Meditama
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sumber and Sarana is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Sarana Meditama Metropolitan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarana Meditama Metr 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 Sarana Meditama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarana Meditama Metr has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Sarana Meditama go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Sarana Meditama
Assuming the 90 days trading horizon Sumber Alfaria Trijaya is expected to generate 1.47 times more return on investment than Sarana Meditama. However, Sumber Alfaria is 1.47 times more volatile than Sarana Meditama Metropolitan. It trades about -0.13 of its potential returns per unit of risk. Sarana Meditama Metropolitan is currently generating about -0.31 per unit of risk. If you would invest 294,000 in Sumber Alfaria Trijaya on October 22, 2024 and sell it today you would lose (14,000) from holding Sumber Alfaria Trijaya or give up 4.76% 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. Sarana Meditama Metropolitan
Performance |
| Timeline |
| Sumber Alfaria Trijaya |
| Sarana Meditama Metr |
Sumber Alfaria and Sarana Meditama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Alfaria and Sarana Meditama
The main advantage of trading using opposite Sumber Alfaria and Sarana Meditama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Sarana Meditama 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 Sarana Meditama will offset losses from the drop in Sarana Meditama'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 |
| Sarana Meditama vs. Siloam International Hospitals | Sarana Meditama vs. Mitra Keluarga Karyasehat | Sarana Meditama vs. Adi Sarana Armada | Sarana Meditama vs. Elang Mahkota Teknologi |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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