Correlation Between Matahari Putra and Saranacentral Bajatama
Can any of the company-specific risk be diversified away by investing in both Matahari Putra and Saranacentral Bajatama 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 Matahari Putra and Saranacentral Bajatama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matahari Putra Prima and Saranacentral Bajatama Tbk, you can compare the effects of market volatilities on Matahari Putra and Saranacentral Bajatama 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 Matahari Putra with a short position of Saranacentral Bajatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matahari Putra and Saranacentral Bajatama.
Diversification Opportunities for Matahari Putra and Saranacentral Bajatama
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matahari and Saranacentral is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Matahari Putra Prima and Saranacentral Bajatama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saranacentral Bajatama and Matahari Putra 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 Matahari Putra Prima are associated (or correlated) with Saranacentral Bajatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saranacentral Bajatama has no effect on the direction of Matahari Putra i.e., Matahari Putra and Saranacentral Bajatama go up and down completely randomly.
Pair Corralation between Matahari Putra and Saranacentral Bajatama
Assuming the 90 days trading horizon Matahari Putra Prima is expected to generate 2.01 times more return on investment than Saranacentral Bajatama. However, Matahari Putra is 2.01 times more volatile than Saranacentral Bajatama Tbk. It trades about 0.06 of its potential returns per unit of risk. Saranacentral Bajatama Tbk is currently generating about 0.03 per unit of risk. If you would invest 7,500 in Matahari Putra Prima on August 24, 2024 and sell it today you would earn a total of 100.00 from holding Matahari Putra Prima or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matahari Putra Prima vs. Saranacentral Bajatama Tbk
Performance |
| Timeline |
| Matahari Putra Prima |
| Saranacentral Bajatama |
Matahari Putra and Saranacentral Bajatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matahari Putra and Saranacentral Bajatama
The main advantage of trading using opposite Matahari Putra and Saranacentral Bajatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matahari Putra position performs unexpectedly, Saranacentral Bajatama 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 Saranacentral Bajatama will offset losses from the drop in Saranacentral Bajatama's long position.| Matahari Putra vs. Multipolar Tbk | Matahari Putra vs. Ramayana Lestari Sentosa | Matahari Putra vs. Lippo Karawaci Tbk | Matahari Putra vs. Mitra Adiperkasa Tbk |
| Saranacentral Bajatama vs. Kedaung Indah Can | Saranacentral Bajatama vs. Langgeng Makmur Industri | Saranacentral Bajatama vs. Kabelindo Murni Tbk | Saranacentral Bajatama vs. Mustika Ratu 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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