Correlation Between Smartfren Telecom and Prima Alloy
Can any of the company-specific risk be diversified away by investing in both Smartfren Telecom and Prima Alloy 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 Prima Alloy 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 Prima Alloy Steel, you can compare the effects of market volatilities on Smartfren Telecom and Prima Alloy 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 Prima Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartfren Telecom and Prima Alloy.
Diversification Opportunities for Smartfren Telecom and Prima Alloy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Smartfren and Prima is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Smartfren Telecom Tbk and Prima Alloy Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Alloy Steel 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 Prima Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Alloy Steel has no effect on the direction of Smartfren Telecom i.e., Smartfren Telecom and Prima Alloy go up and down completely randomly.
Pair Corralation between Smartfren Telecom and Prima Alloy
If you would invest 2,300 in Smartfren Telecom Tbk on January 10, 2025 and sell it today you would earn a total of 0.00 from holding Smartfren Telecom Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartfren Telecom Tbk vs. Prima Alloy Steel
Performance |
| Timeline |
| Smartfren Telecom Tbk |
Risk-Adjusted Performance
Weak
Weak | Strong |
| Prima Alloy Steel |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Smartfren Telecom and Prima Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartfren Telecom and Prima Alloy
The main advantage of trading using opposite Smartfren Telecom and Prima Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartfren Telecom position performs unexpectedly, Prima Alloy 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 Prima Alloy will offset losses from the drop in Prima Alloy's long position.The idea behind Smartfren Telecom Tbk and Prima Alloy Steel 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.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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