Correlation Between Saranacentral Bajatama and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Saranacentral Bajatama and Timah Persero 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 Saranacentral Bajatama and Timah Persero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saranacentral Bajatama Tbk and Timah Persero Tbk, you can compare the effects of market volatilities on Saranacentral Bajatama and Timah Persero 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 Saranacentral Bajatama with a short position of Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saranacentral Bajatama and Timah Persero.
Diversification Opportunities for Saranacentral Bajatama and Timah Persero
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saranacentral and Timah is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Saranacentral Bajatama Tbk and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero Tbk and Saranacentral Bajatama 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 Saranacentral Bajatama Tbk are associated (or correlated) with Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Saranacentral Bajatama i.e., Saranacentral Bajatama and Timah Persero go up and down completely randomly.
Pair Corralation between Saranacentral Bajatama and Timah Persero
Assuming the 90 days trading horizon Saranacentral Bajatama Tbk is expected to generate 1.25 times more return on investment than Timah Persero. However, Saranacentral Bajatama is 1.25 times more volatile than Timah Persero Tbk. It trades about 0.02 of its potential returns per unit of risk. Timah Persero Tbk is currently generating about -0.09 per unit of risk. If you would invest 10,100 in Saranacentral Bajatama Tbk on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Saranacentral Bajatama Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saranacentral Bajatama Tbk vs. Timah Persero Tbk
Performance |
| Timeline |
| Saranacentral Bajatama |
| Timah Persero Tbk |
Saranacentral Bajatama and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saranacentral Bajatama and Timah Persero
The main advantage of trading using opposite Saranacentral Bajatama and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saranacentral Bajatama position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero's long position.| Saranacentral Bajatama vs. Kedaung Indah Can | Saranacentral Bajatama vs. Langgeng Makmur Industri | Saranacentral Bajatama vs. Kabelindo Murni Tbk | Saranacentral Bajatama vs. Mustika Ratu Tbk |
| Timah Persero vs. Vale Indonesia Tbk | Timah Persero vs. Aneka Tambang Persero | Timah Persero vs. Bukit Asam Tbk | Timah Persero vs. Perusahaan Gas Negara |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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