Correlation Between Alam Sutera and Trimitra Propertindo
Can any of the company-specific risk be diversified away by investing in both Alam Sutera and Trimitra Propertindo 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 Alam Sutera and Trimitra Propertindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alam Sutera Realty and Trimitra Propertindo Tbk, you can compare the effects of market volatilities on Alam Sutera and Trimitra Propertindo 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 Alam Sutera with a short position of Trimitra Propertindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alam Sutera and Trimitra Propertindo.
Diversification Opportunities for Alam Sutera and Trimitra Propertindo
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alam and Trimitra is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alam Sutera Realty and Trimitra Propertindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimitra Propertindo Tbk and Alam Sutera 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 Alam Sutera Realty are associated (or correlated) with Trimitra Propertindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimitra Propertindo Tbk has no effect on the direction of Alam Sutera i.e., Alam Sutera and Trimitra Propertindo go up and down completely randomly.
Pair Corralation between Alam Sutera and Trimitra Propertindo
Assuming the 90 days trading horizon Alam Sutera Realty is expected to under-perform the Trimitra Propertindo. But the stock apears to be less risky and, when comparing its historical volatility, Alam Sutera Realty is 1.3 times less risky than Trimitra Propertindo. The stock trades about -0.19 of its potential returns per unit of risk. The Trimitra Propertindo Tbk is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Trimitra Propertindo Tbk on September 13, 2024 and sell it today you would earn a total of 400.00 from holding Trimitra Propertindo Tbk or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alam Sutera Realty vs. Trimitra Propertindo Tbk
Performance |
| Timeline |
| Alam Sutera Realty |
| Trimitra Propertindo Tbk |
Alam Sutera and Trimitra Propertindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alam Sutera and Trimitra Propertindo
The main advantage of trading using opposite Alam Sutera and Trimitra Propertindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alam Sutera position performs unexpectedly, Trimitra Propertindo 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 Trimitra Propertindo will offset losses from the drop in Trimitra Propertindo's long position.| Alam Sutera vs. Bumi Serpong Damai | Alam Sutera vs. Summarecon Agung Tbk | Alam Sutera vs. Lippo Karawaci Tbk | Alam Sutera vs. Ciputra Development Tbk |
| Trimitra Propertindo vs. Jaya Sukses Makmur | Trimitra Propertindo vs. Mahkota Group Tbk | Trimitra Propertindo vs. Pollux Properti Indonesia | Trimitra Propertindo vs. Kioson Komersial Indonesia |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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