Correlation Between PT Sari and Cipta Selera
Can any of the company-specific risk be diversified away by investing in both PT Sari and Cipta Selera 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 PT Sari and Cipta Selera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Sari Kreasi and Cipta Selera Murni, you can compare the effects of market volatilities on PT Sari and Cipta Selera 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 PT Sari with a short position of Cipta Selera. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sari and Cipta Selera.
Diversification Opportunities for PT Sari and Cipta Selera
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RAFI and Cipta is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PT Sari Kreasi and Cipta Selera Murni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipta Selera Murni and PT Sari 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 PT Sari Kreasi are associated (or correlated) with Cipta Selera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipta Selera Murni has no effect on the direction of PT Sari i.e., PT Sari and Cipta Selera go up and down completely randomly.
Pair Corralation between PT Sari and Cipta Selera
Assuming the 90 days trading horizon PT Sari Kreasi is expected to under-perform the Cipta Selera. But the stock apears to be less risky and, when comparing its historical volatility, PT Sari Kreasi is 1.5 times less risky than Cipta Selera. The stock trades about -0.08 of its potential returns per unit of risk. The Cipta Selera Murni is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 301,000 in Cipta Selera Murni on October 23, 2024 and sell it today you would earn a total of 19,000 from holding Cipta Selera Murni or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Sari Kreasi vs. Cipta Selera Murni
Performance |
| Timeline |
| PT Sari Kreasi |
| Cipta Selera Murni |
PT Sari and Cipta Selera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Sari and Cipta Selera
The main advantage of trading using opposite PT Sari and Cipta Selera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Sari position performs unexpectedly, Cipta Selera 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 Cipta Selera will offset losses from the drop in Cipta Selera's long position.| PT Sari vs. PT Dewi Shri | PT Sari vs. Bangun Karya Perkasa | PT Sari vs. Gaya Abadi Sempurna | PT Sari vs. Habco Trans Maritima |
| Cipta Selera vs. Net Visi Media | Cipta Selera vs. Surya Citra Media | Cipta Selera vs. Inocycle Technology Tbk | Cipta Selera vs. HK Metals Utama |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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