Correlation Between Indonesia Fibreboard and Saraswanti Anugerah
Can any of the company-specific risk be diversified away by investing in both Indonesia Fibreboard and Saraswanti Anugerah 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 Indonesia Fibreboard and Saraswanti Anugerah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indonesia Fibreboard Industry and Saraswanti Anugerah Makmur, you can compare the effects of market volatilities on Indonesia Fibreboard and Saraswanti Anugerah 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 Indonesia Fibreboard with a short position of Saraswanti Anugerah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Fibreboard and Saraswanti Anugerah.
Diversification Opportunities for Indonesia Fibreboard and Saraswanti Anugerah
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indonesia and Saraswanti is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Fibreboard Industry and Saraswanti Anugerah Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saraswanti Anugerah and Indonesia Fibreboard 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 Indonesia Fibreboard Industry are associated (or correlated) with Saraswanti Anugerah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saraswanti Anugerah has no effect on the direction of Indonesia Fibreboard i.e., Indonesia Fibreboard and Saraswanti Anugerah go up and down completely randomly.
Pair Corralation between Indonesia Fibreboard and Saraswanti Anugerah
Assuming the 90 days trading horizon Indonesia Fibreboard Industry is expected to generate 1.53 times more return on investment than Saraswanti Anugerah. However, Indonesia Fibreboard is 1.53 times more volatile than Saraswanti Anugerah Makmur. It trades about 0.07 of its potential returns per unit of risk. Saraswanti Anugerah Makmur is currently generating about 0.03 per unit of risk. If you would invest 14,057 in Indonesia Fibreboard Industry on September 14, 2024 and sell it today you would earn a total of 7,143 from holding Indonesia Fibreboard Industry or generate 50.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Fibreboard Industry vs. Saraswanti Anugerah Makmur
Performance |
| Timeline |
| Indonesia Fibreboard |
| Saraswanti Anugerah |
Indonesia Fibreboard and Saraswanti Anugerah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Fibreboard and Saraswanti Anugerah
The main advantage of trading using opposite Indonesia Fibreboard and Saraswanti Anugerah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Fibreboard position performs unexpectedly, Saraswanti Anugerah 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 Saraswanti Anugerah will offset losses from the drop in Saraswanti Anugerah's long position.| Indonesia Fibreboard vs. Gunung Raja Paksi | Indonesia Fibreboard vs. Satyamitra Kemas Lestari | Indonesia Fibreboard vs. Ifishdeco PT | Indonesia Fibreboard vs. Saraswanti Anugerah Makmur |
| Saraswanti Anugerah vs. Panca Budi Idaman | Saraswanti Anugerah vs. Gunung Raja Paksi | Saraswanti Anugerah vs. Aneka Gas Industri | Saraswanti Anugerah vs. Mark Dynamics 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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