Correlation Between Cikarang Listrindo and PT Surya
Can any of the company-specific risk be diversified away by investing in both Cikarang Listrindo and PT Surya 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 Cikarang Listrindo and PT Surya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cikarang Listrindo Tbk and PT Surya Pertiwi, you can compare the effects of market volatilities on Cikarang Listrindo and PT Surya 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 Cikarang Listrindo with a short position of PT Surya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cikarang Listrindo and PT Surya.
Diversification Opportunities for Cikarang Listrindo and PT Surya
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cikarang and SPTO is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cikarang Listrindo Tbk and PT Surya Pertiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Surya Pertiwi and Cikarang Listrindo 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 Cikarang Listrindo Tbk are associated (or correlated) with PT Surya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Surya Pertiwi has no effect on the direction of Cikarang Listrindo i.e., Cikarang Listrindo and PT Surya go up and down completely randomly.
Pair Corralation between Cikarang Listrindo and PT Surya
Assuming the 90 days trading horizon Cikarang Listrindo is expected to generate 13.21 times less return on investment than PT Surya. But when comparing it to its historical volatility, Cikarang Listrindo Tbk is 2.8 times less risky than PT Surya. It trades about 0.06 of its potential returns per unit of risk. PT Surya Pertiwi is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 56,818 in PT Surya Pertiwi on August 27, 2024 and sell it today you would earn a total of 5,682 from holding PT Surya Pertiwi or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cikarang Listrindo Tbk vs. PT Surya Pertiwi
Performance |
| Timeline |
| Cikarang Listrindo Tbk |
| PT Surya Pertiwi |
Cikarang Listrindo and PT Surya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cikarang Listrindo and PT Surya
The main advantage of trading using opposite Cikarang Listrindo and PT Surya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cikarang Listrindo position performs unexpectedly, PT Surya 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 PT Surya will offset losses from the drop in PT Surya's long position.| Cikarang Listrindo vs. Aneka Tambang Persero | Cikarang Listrindo vs. Bukit Asam Tbk | Cikarang Listrindo vs. Telkom Indonesia Tbk | Cikarang Listrindo vs. Astra International 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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