Correlation Between Prasidha Aneka and Sekar Bumi
Can any of the company-specific risk be diversified away by investing in both Prasidha Aneka and Sekar Bumi 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 Prasidha Aneka and Sekar Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prasidha Aneka Niaga and Sekar Bumi Tbk, you can compare the effects of market volatilities on Prasidha Aneka and Sekar Bumi 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 Prasidha Aneka with a short position of Sekar Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prasidha Aneka and Sekar Bumi.
Diversification Opportunities for Prasidha Aneka and Sekar Bumi
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prasidha and Sekar is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Prasidha Aneka Niaga and Sekar Bumi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekar Bumi Tbk and Prasidha Aneka 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 Prasidha Aneka Niaga are associated (or correlated) with Sekar Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekar Bumi Tbk has no effect on the direction of Prasidha Aneka i.e., Prasidha Aneka and Sekar Bumi go up and down completely randomly.
Pair Corralation between Prasidha Aneka and Sekar Bumi
Assuming the 90 days trading horizon Prasidha Aneka is expected to generate 59.48 times less return on investment than Sekar Bumi. But when comparing it to its historical volatility, Prasidha Aneka Niaga is 4.11 times less risky than Sekar Bumi. It trades about 0.01 of its potential returns per unit of risk. Sekar Bumi Tbk is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 22,600 in Sekar Bumi Tbk on September 3, 2024 and sell it today you would earn a total of 16,800 from holding Sekar Bumi Tbk or generate 74.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prasidha Aneka Niaga vs. Sekar Bumi Tbk
Performance |
| Timeline |
| Prasidha Aneka Niaga |
| Sekar Bumi Tbk |
Prasidha Aneka and Sekar Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prasidha Aneka and Sekar Bumi
The main advantage of trading using opposite Prasidha Aneka and Sekar Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prasidha Aneka position performs unexpectedly, Sekar Bumi 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 Sekar Bumi will offset losses from the drop in Sekar Bumi's long position.| Prasidha Aneka vs. Sekar Laut Tbk | Prasidha Aneka vs. Siantar Top Tbk | Prasidha Aneka vs. Pyridam Farma Tbk | Prasidha Aneka vs. Langgeng Makmur Industri |
| Sekar Bumi vs. Astra International Tbk | Sekar Bumi vs. Unilever Indonesia Tbk | Sekar Bumi vs. Telkom Indonesia Tbk | Sekar Bumi vs. Bank Mandiri Persero |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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