Correlation Between Adi Sarana and Surya Esa
Can any of the company-specific risk be diversified away by investing in both Adi Sarana and Surya Esa 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 Adi Sarana and Surya Esa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adi Sarana Armada and Surya Esa Perkasa, you can compare the effects of market volatilities on Adi Sarana and Surya Esa 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 Adi Sarana with a short position of Surya Esa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adi Sarana and Surya Esa.
Diversification Opportunities for Adi Sarana and Surya Esa
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adi and Surya is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Adi Sarana Armada and Surya Esa Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Esa Perkasa and Adi Sarana 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 Adi Sarana Armada are associated (or correlated) with Surya Esa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Esa Perkasa has no effect on the direction of Adi Sarana i.e., Adi Sarana and Surya Esa go up and down completely randomly.
Pair Corralation between Adi Sarana and Surya Esa
Assuming the 90 days trading horizon Adi Sarana Armada is expected to under-perform the Surya Esa. But the stock apears to be less risky and, when comparing its historical volatility, Adi Sarana Armada is 1.25 times less risky than Surya Esa. The stock trades about -0.01 of its potential returns per unit of risk. The Surya Esa Perkasa is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 82,500 in Surya Esa Perkasa on November 3, 2024 and sell it today you would earn a total of 2,500 from holding Surya Esa Perkasa or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adi Sarana Armada vs. Surya Esa Perkasa
Performance |
| Timeline |
| Adi Sarana Armada |
| Surya Esa Perkasa |
Adi Sarana and Surya Esa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adi Sarana and Surya Esa
The main advantage of trading using opposite Adi Sarana and Surya Esa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adi Sarana position performs unexpectedly, Surya Esa 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 Surya Esa will offset losses from the drop in Surya Esa's long position.| Adi Sarana vs. Samudera Indonesia Tbk | Adi Sarana vs. Weha Transportasi Indonesia | Adi Sarana vs. Rig Tenders Tbk | Adi Sarana vs. Total Bangun Persada |
| Surya Esa vs. Harum Energy Tbk | Surya Esa vs. Delta Dunia Makmur | Surya Esa vs. Adi Sarana Armada | Surya Esa 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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