Correlation Between Supra Boga and Midi Utama
Can any of the company-specific risk be diversified away by investing in both Supra Boga and Midi Utama 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 Midi Utama 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 Midi Utama Indonesia, you can compare the effects of market volatilities on Supra Boga and Midi Utama 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 Midi Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supra Boga and Midi Utama.
Diversification Opportunities for Supra Boga and Midi Utama
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Supra and Midi is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Supra Boga Lestari and Midi Utama Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midi Utama Indonesia 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 Midi Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midi Utama Indonesia has no effect on the direction of Supra Boga i.e., Supra Boga and Midi Utama go up and down completely randomly.
Pair Corralation between Supra Boga and Midi Utama
Assuming the 90 days trading horizon Supra Boga Lestari is expected to generate 1.15 times more return on investment than Midi Utama. However, Supra Boga is 1.15 times more volatile than Midi Utama Indonesia. It trades about -0.14 of its potential returns per unit of risk. Midi Utama Indonesia is currently generating about -0.35 per unit of risk. If you would invest 52,000 in Supra Boga Lestari on September 1, 2024 and sell it today you would lose (2,800) from holding Supra Boga Lestari or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supra Boga Lestari vs. Midi Utama Indonesia
Performance |
| Timeline |
| Supra Boga Lestari |
| Midi Utama Indonesia |
Supra Boga and Midi Utama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supra Boga and Midi Utama
The main advantage of trading using opposite Supra Boga and Midi Utama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supra Boga position performs unexpectedly, Midi Utama 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 Midi Utama will offset losses from the drop in Midi Utama's long position.| Supra Boga vs. Bank BRISyariah Tbk | Supra Boga vs. Mitra Pinasthika Mustika | Supra Boga vs. Jakarta Int Hotels | Supra Boga vs. Indosterling Technomedia Tbk |
| Midi Utama vs. Sumber Alfaria Trijaya | Midi Utama vs. Hero Supermarket Tbk | Midi Utama vs. Supra Boga Lestari | Midi Utama vs. Multi Indocitra 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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