Correlation Between Austindo Nusantara and Sekar Bumi
Can any of the company-specific risk be diversified away by investing in both Austindo Nusantara and Sekar Bumi 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 Austindo Nusantara and Sekar Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austindo Nusantara Jaya and Sekar Bumi Tbk, you can compare the effects of market volatilities on Austindo Nusantara and Sekar Bumi 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 Austindo Nusantara with a short position of Sekar Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austindo Nusantara and Sekar Bumi.
Diversification Opportunities for Austindo Nusantara and Sekar Bumi
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Austindo and Sekar is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Austindo Nusantara Jaya and Sekar Bumi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekar Bumi Tbk and Austindo Nusantara 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 Austindo Nusantara Jaya are associated (or correlated) with Sekar Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekar Bumi Tbk has no effect on the direction of Austindo Nusantara i.e., Austindo Nusantara and Sekar Bumi go up and down completely randomly.
Pair Corralation between Austindo Nusantara and Sekar Bumi
Assuming the 90 days trading horizon Austindo Nusantara is expected to generate 1.89 times less return on investment than Sekar Bumi. But when comparing it to its historical volatility, Austindo Nusantara Jaya is 2.47 times less risky than Sekar Bumi. It trades about 0.03 of its potential returns per unit of risk. Sekar Bumi Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 37,568 in Sekar Bumi Tbk on September 13, 2024 and sell it today you would earn a total of 432.00 from holding Sekar Bumi Tbk or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austindo Nusantara Jaya vs. Sekar Bumi Tbk
Performance |
| Timeline |
| Austindo Nusantara Jaya |
| Sekar Bumi Tbk |
Austindo Nusantara and Sekar Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austindo Nusantara and Sekar Bumi
The main advantage of trading using opposite Austindo Nusantara and Sekar Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austindo Nusantara position performs unexpectedly, Sekar Bumi 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 Sekar Bumi will offset losses from the drop in Sekar Bumi's long position.| Austindo Nusantara vs. Dharma Satya Nusantara | Austindo Nusantara vs. Provident Agro Tbk | Austindo Nusantara vs. Salim Ivomas Pratama | Austindo Nusantara vs. Jaya Agra Wattie |
| Sekar Bumi vs. Austindo Nusantara Jaya | Sekar Bumi vs. Garudafood Putra Putri | Sekar Bumi vs. Provident Agro Tbk | Sekar Bumi vs. Dharma Satya Nusantara |
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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