Correlation Between Hero Supermarket and Sumber Alfaria
Can any of the company-specific risk be diversified away by investing in both Hero Supermarket and Sumber Alfaria 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 Hero Supermarket and Sumber Alfaria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hero Supermarket Tbk and Sumber Alfaria Trijaya, you can compare the effects of market volatilities on Hero Supermarket and Sumber Alfaria 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 Hero Supermarket with a short position of Sumber Alfaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hero Supermarket and Sumber Alfaria.
Diversification Opportunities for Hero Supermarket and Sumber Alfaria
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hero and Sumber is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hero Supermarket Tbk and Sumber Alfaria Trijaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Alfaria Trijaya and Hero Supermarket 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 Hero Supermarket Tbk are associated (or correlated) with Sumber Alfaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Alfaria Trijaya has no effect on the direction of Hero Supermarket i.e., Hero Supermarket and Sumber Alfaria go up and down completely randomly.
Pair Corralation between Hero Supermarket and Sumber Alfaria
Assuming the 90 days trading horizon Hero Supermarket Tbk is expected to generate 0.93 times more return on investment than Sumber Alfaria. However, Hero Supermarket Tbk is 1.07 times less risky than Sumber Alfaria. It trades about -0.33 of its potential returns per unit of risk. Sumber Alfaria Trijaya is currently generating about -0.32 per unit of risk. If you would invest 66,000 in Hero Supermarket Tbk on September 1, 2024 and sell it today you would lose (9,000) from holding Hero Supermarket Tbk or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hero Supermarket Tbk vs. Sumber Alfaria Trijaya
Performance |
| Timeline |
| Hero Supermarket Tbk |
| Sumber Alfaria Trijaya |
Hero Supermarket and Sumber Alfaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hero Supermarket and Sumber Alfaria
The main advantage of trading using opposite Hero Supermarket and Sumber Alfaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hero Supermarket position performs unexpectedly, Sumber Alfaria 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 Sumber Alfaria will offset losses from the drop in Sumber Alfaria's long position.| Hero Supermarket vs. Bank BRISyariah Tbk | Hero Supermarket vs. Mitra Pinasthika Mustika | Hero Supermarket vs. Jakarta Int Hotels | Hero Supermarket vs. Indosterling Technomedia Tbk |
| Sumber Alfaria vs. Bank BRISyariah Tbk | Sumber Alfaria vs. Mitra Pinasthika Mustika | Sumber Alfaria vs. Jakarta Int Hotels | Sumber Alfaria vs. Indosterling Technomedia Tbk |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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