Correlation Between Smartfren Telecom and Cipta Selera
Can any of the company-specific risk be diversified away by investing in both Smartfren Telecom and Cipta Selera 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 Smartfren Telecom and Cipta Selera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smartfren Telecom Tbk and Cipta Selera Murni, you can compare the effects of market volatilities on Smartfren Telecom and Cipta Selera 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 Smartfren Telecom with a short position of Cipta Selera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartfren Telecom and Cipta Selera.
Diversification Opportunities for Smartfren Telecom and Cipta Selera
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Smartfren and Cipta is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Smartfren Telecom Tbk and Cipta Selera Murni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipta Selera Murni and Smartfren Telecom 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 Smartfren Telecom Tbk are associated (or correlated) with Cipta Selera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipta Selera Murni has no effect on the direction of Smartfren Telecom i.e., Smartfren Telecom and Cipta Selera go up and down completely randomly.
Pair Corralation between Smartfren Telecom and Cipta Selera
Assuming the 90 days trading horizon Smartfren Telecom Tbk is expected to generate 0.91 times more return on investment than Cipta Selera. However, Smartfren Telecom Tbk is 1.1 times less risky than Cipta Selera. It trades about 0.19 of its potential returns per unit of risk. Cipta Selera Murni is currently generating about 0.05 per unit of risk. If you would invest 2,200 in Smartfren Telecom Tbk on November 3, 2024 and sell it today you would earn a total of 200.00 from holding Smartfren Telecom Tbk or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartfren Telecom Tbk vs. Cipta Selera Murni
Performance |
| Timeline |
| Smartfren Telecom Tbk |
| Cipta Selera Murni |
Smartfren Telecom and Cipta Selera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartfren Telecom and Cipta Selera
The main advantage of trading using opposite Smartfren Telecom and Cipta Selera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartfren Telecom position performs unexpectedly, Cipta Selera 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 Cipta Selera will offset losses from the drop in Cipta Selera's long position.| Smartfren Telecom vs. Indosat Tbk | Smartfren Telecom vs. XL Axiata Tbk | Smartfren Telecom vs. Energi Mega Persada | Smartfren Telecom vs. Bakrie Brothers Tbk |
| Cipta Selera vs. Galva Technologies Tbk | Cipta Selera vs. Fast Food Indonesia | Cipta Selera vs. PT Indofood Sukses | Cipta Selera vs. Diamond Food 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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