Correlation Between Boeing and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Boeing and PT Sarana 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 Boeing and PT Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Boeing and PT Sarana Menara, you can compare the effects of market volatilities on Boeing and PT Sarana 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 Boeing with a short position of PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boeing and PT Sarana.
Diversification Opportunities for Boeing and PT Sarana
Poor diversification
The 3 months correlation between Boeing and SMNUF is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Boeing and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara and Boeing 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 The Boeing are associated (or correlated) with PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Boeing i.e., Boeing and PT Sarana go up and down completely randomly.
Pair Corralation between Boeing and PT Sarana
Allowing for the 90-day total investment horizon The Boeing is expected to generate 0.36 times more return on investment than PT Sarana. However, The Boeing is 2.79 times less risky than PT Sarana. It trades about -0.01 of its potential returns per unit of risk. PT Sarana Menara is currently generating about -0.02 per unit of risk. If you would invest 18,510 in The Boeing on August 25, 2024 and sell it today you would lose (3,581) from holding The Boeing or give up 19.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 44.06% |
| Values | Daily Returns |
The Boeing vs. PT Sarana Menara
Performance |
| Timeline |
| Boeing |
| PT Sarana Menara |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Boeing and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boeing and PT Sarana
The main advantage of trading using opposite Boeing and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boeing position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana's long position.The idea behind The Boeing and PT Sarana Menara pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PT Sarana vs. Proximus NV ADR | PT Sarana vs. Singapore Telecommunications Limited | PT Sarana vs. Telstra Limited | PT Sarana vs. MTN Group Ltd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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