Correlation Between Adi Sarana and Sarana Meditama
Can any of the company-specific risk be diversified away by investing in both Adi Sarana 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 Adi Sarana and Sarana Meditama 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 Sarana Meditama Metropolitan, you can compare the effects of market volatilities on Adi Sarana 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 Adi Sarana with a short position of Sarana Meditama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adi Sarana and Sarana Meditama.
Diversification Opportunities for Adi Sarana and Sarana Meditama
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Adi and Sarana is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Adi Sarana Armada 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 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 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 Adi Sarana i.e., Adi Sarana and Sarana Meditama go up and down completely randomly.
Pair Corralation between Adi Sarana and Sarana Meditama
Assuming the 90 days trading horizon Adi Sarana is expected to generate 88.0 times less return on investment than Sarana Meditama. But when comparing it to its historical volatility, Adi Sarana Armada is 2.08 times less risky than Sarana Meditama. It trades about 0.0 of its potential returns per unit of risk. Sarana Meditama Metropolitan is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 23,800 in Sarana Meditama Metropolitan on November 3, 2024 and sell it today you would earn a total of 2,400 from holding Sarana Meditama Metropolitan or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adi Sarana Armada vs. Sarana Meditama Metropolitan
Performance |
| Timeline |
| Adi Sarana Armada |
| Sarana Meditama Metr |
Adi Sarana and Sarana Meditama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adi Sarana and Sarana Meditama
The main advantage of trading using opposite Adi Sarana and Sarana Meditama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adi Sarana 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.| Adi Sarana vs. Samudera Indonesia Tbk | Adi Sarana vs. Weha Transportasi Indonesia | Adi Sarana vs. Rig Tenders Tbk | Adi Sarana vs. Total Bangun Persada |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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