Correlation Between Sumber Alfaria and Tempo Inti
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Tempo Inti 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 Tempo Inti 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 Tempo Inti Media, you can compare the effects of market volatilities on Sumber Alfaria and Tempo Inti 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 Tempo Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Tempo Inti.
Diversification Opportunities for Sumber Alfaria and Tempo Inti
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sumber and Tempo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Tempo Inti Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempo Inti Media 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 Tempo Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempo Inti Media has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Tempo Inti go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Tempo Inti
Assuming the 90 days trading horizon Sumber Alfaria is expected to generate 11.12 times less return on investment than Tempo Inti. But when comparing it to its historical volatility, Sumber Alfaria Trijaya is 2.84 times less risky than Tempo Inti. It trades about 0.01 of its potential returns per unit of risk. Tempo Inti Media is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,300 in Tempo Inti Media on September 1, 2024 and sell it today you would earn a total of 900.00 from holding Tempo Inti Media or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.77% |
| Values | Daily Returns |
Sumber Alfaria Trijaya vs. Tempo Inti Media
Performance |
| Timeline |
| Sumber Alfaria Trijaya |
| Tempo Inti Media |
Sumber Alfaria and Tempo Inti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Alfaria and Tempo Inti
The main advantage of trading using opposite Sumber Alfaria and Tempo Inti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Tempo Inti 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 Tempo Inti will offset losses from the drop in Tempo Inti's long position.| Sumber Alfaria vs. Bank BRISyariah Tbk | Sumber Alfaria vs. Mitra Pinasthika Mustika | Sumber Alfaria vs. Jakarta Int Hotels | Sumber Alfaria vs. Indosterling Technomedia Tbk |
| Tempo Inti vs. Wicaksana Overseas International | Tempo Inti vs. Wahana Pronatural | Tempo Inti vs. Tigaraksa Satria Tbk | Tempo Inti vs. Millennium Pharmacon International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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