Correlation Between Supra Boga and Hero Supermarket
Can any of the company-specific risk be diversified away by investing in both Supra Boga and Hero Supermarket 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 Supra Boga and Hero Supermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supra Boga Lestari and Hero Supermarket Tbk, you can compare the effects of market volatilities on Supra Boga and Hero Supermarket 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 Supra Boga with a short position of Hero Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supra Boga and Hero Supermarket.
Diversification Opportunities for Supra Boga and Hero Supermarket
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Supra and Hero is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Supra Boga Lestari and Hero Supermarket Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hero Supermarket Tbk and Supra Boga 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 Supra Boga Lestari are associated (or correlated) with Hero Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hero Supermarket Tbk has no effect on the direction of Supra Boga i.e., Supra Boga and Hero Supermarket go up and down completely randomly.
Pair Corralation between Supra Boga and Hero Supermarket
Assuming the 90 days trading horizon Supra Boga Lestari is expected to generate 0.91 times more return on investment than Hero Supermarket. However, Supra Boga Lestari is 1.1 times less risky than Hero Supermarket. It trades about -0.04 of its potential returns per unit of risk. Hero Supermarket Tbk is currently generating about -0.07 per unit of risk. If you would invest 80,000 in Supra Boga Lestari on September 3, 2024 and sell it today you would lose (30,800) from holding Supra Boga Lestari or give up 38.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Supra Boga Lestari vs. Hero Supermarket Tbk
Performance |
| Timeline |
| Supra Boga Lestari |
| Hero Supermarket Tbk |
Supra Boga and Hero Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supra Boga and Hero Supermarket
The main advantage of trading using opposite Supra Boga and Hero Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supra Boga position performs unexpectedly, Hero Supermarket 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 Hero Supermarket will offset losses from the drop in Hero Supermarket's long position.| Supra Boga vs. Nippon Indosari Corpindo | Supra Boga vs. Ramayana Lestari Sentosa | Supra Boga vs. Midi Utama Indonesia | Supra Boga vs. Hero Supermarket Tbk |
| Hero Supermarket vs. Astra International Tbk | Hero Supermarket vs. Unilever Indonesia Tbk | Hero Supermarket vs. Telkom Indonesia Tbk | Hero Supermarket 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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