Correlation Between Surya Permata and Bintang Oto
Can any of the company-specific risk be diversified away by investing in both Surya Permata and Bintang Oto 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 Surya Permata and Bintang Oto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surya Permata Andalan and Bintang Oto Global, you can compare the effects of market volatilities on Surya Permata and Bintang Oto 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 Surya Permata with a short position of Bintang Oto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Permata and Bintang Oto.
Diversification Opportunities for Surya Permata and Bintang Oto
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Surya and Bintang is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Surya Permata Andalan and Bintang Oto Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Oto Global and Surya Permata 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 Surya Permata Andalan are associated (or correlated) with Bintang Oto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Oto Global has no effect on the direction of Surya Permata i.e., Surya Permata and Bintang Oto go up and down completely randomly.
Pair Corralation between Surya Permata and Bintang Oto
Assuming the 90 days trading horizon Surya Permata Andalan is expected to under-perform the Bintang Oto. In addition to that, Surya Permata is 2.08 times more volatile than Bintang Oto Global. It trades about -0.07 of its total potential returns per unit of risk. Bintang Oto Global is currently generating about -0.11 per unit of volatility. If you would invest 124,000 in Bintang Oto Global on August 25, 2024 and sell it today you would lose (70,000) from holding Bintang Oto Global or give up 56.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surya Permata Andalan vs. Bintang Oto Global
Performance |
| Timeline |
| Surya Permata Andalan |
| Bintang Oto Global |
Surya Permata and Bintang Oto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surya Permata and Bintang Oto
The main advantage of trading using opposite Surya Permata and Bintang Oto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Permata position performs unexpectedly, Bintang Oto 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 Bintang Oto will offset losses from the drop in Bintang Oto's long position.| Surya Permata vs. Bintang Oto Global | Surya Permata vs. Metro Healthcare Indonesia | Surya Permata vs. Bhakti Multi Artha | Surya Permata vs. MNC Vision Networks |
| Bintang Oto vs. Surya Permata Andalan | Bintang Oto vs. Aneka Gas Industri | Bintang Oto vs. Buana Listya Tama | Bintang Oto vs. Trisula Textile Industries |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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