Correlation Between Surya Permata and Putra Rajawali
Can any of the company-specific risk be diversified away by investing in both Surya Permata and Putra Rajawali 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 Putra Rajawali 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 Putra Rajawali Kencana, you can compare the effects of market volatilities on Surya Permata and Putra Rajawali 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 Putra Rajawali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Permata and Putra Rajawali.
Diversification Opportunities for Surya Permata and Putra Rajawali
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Surya and Putra is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Surya Permata Andalan and Putra Rajawali Kencana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Rajawali Kencana 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 Putra Rajawali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Rajawali Kencana has no effect on the direction of Surya Permata i.e., Surya Permata and Putra Rajawali go up and down completely randomly.
Pair Corralation between Surya Permata and Putra Rajawali
Assuming the 90 days trading horizon Surya Permata Andalan is expected to generate 1.01 times more return on investment than Putra Rajawali. However, Surya Permata is 1.01 times more volatile than Putra Rajawali Kencana. It trades about -0.05 of its potential returns per unit of risk. Putra Rajawali Kencana is currently generating about -0.06 per unit of risk. If you would invest 53,000 in Surya Permata Andalan on September 4, 2024 and sell it today you would lose (38,900) from holding Surya Permata Andalan or give up 73.4% 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. Putra Rajawali Kencana
Performance |
| Timeline |
| Surya Permata Andalan |
| Putra Rajawali Kencana |
Surya Permata and Putra Rajawali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surya Permata and Putra Rajawali
The main advantage of trading using opposite Surya Permata and Putra Rajawali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Permata position performs unexpectedly, Putra Rajawali 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 Putra Rajawali will offset losses from the drop in Putra Rajawali's long position.| Surya Permata vs. Campina Ice Cream | Surya Permata vs. Mitra Pinasthika Mustika | Surya Permata vs. Jakarta Int Hotels | Surya Permata vs. Indosat Tbk |
| Putra Rajawali vs. PT Trimuda Nuansa | Putra Rajawali vs. Yelooo Integra Datanet | Putra Rajawali vs. Transcoal Pacific Tbk | Putra Rajawali vs. Weha Transportasi 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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