Correlation Between Sarana Meditama and Royal Prima
Can any of the company-specific risk be diversified away by investing in both Sarana Meditama and Royal Prima 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 Sarana Meditama and Royal Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sarana Meditama Metropolitan and Royal Prima PT, you can compare the effects of market volatilities on Sarana Meditama and Royal Prima 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 Sarana Meditama with a short position of Royal Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarana Meditama and Royal Prima.
Diversification Opportunities for Sarana Meditama and Royal Prima
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sarana and Royal is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sarana Meditama Metropolitan and Royal Prima PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Prima PT and Sarana Meditama 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 Sarana Meditama Metropolitan are associated (or correlated) with Royal Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Prima PT has no effect on the direction of Sarana Meditama i.e., Sarana Meditama and Royal Prima go up and down completely randomly.
Pair Corralation between Sarana Meditama and Royal Prima
Assuming the 90 days trading horizon Sarana Meditama Metropolitan is expected to under-perform the Royal Prima. In addition to that, Sarana Meditama is 1.3 times more volatile than Royal Prima PT. It trades about -0.25 of its total potential returns per unit of risk. Royal Prima PT is currently generating about -0.15 per unit of volatility. If you would invest 6,100 in Royal Prima PT on September 3, 2024 and sell it today you would lose (300.00) from holding Royal Prima PT or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sarana Meditama Metropolitan vs. Royal Prima PT
Performance |
| Timeline |
| Sarana Meditama Metr |
| Royal Prima PT |
Sarana Meditama and Royal Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarana Meditama and Royal Prima
The main advantage of trading using opposite Sarana Meditama and Royal Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarana Meditama position performs unexpectedly, Royal Prima 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 Royal Prima will offset losses from the drop in Royal Prima's long position.| Sarana Meditama vs. Mitra Keluarga Karyasehat | Sarana Meditama vs. Surya Citra Media | Sarana Meditama vs. Sawit Sumbermas Sarana | Sarana Meditama vs. Mitra Pinasthika Mustika |
| Royal Prima vs. Medikaloka Hermina PT | Royal Prima vs. Sejahteraraya Anugrahjaya Tbk | Royal Prima vs. Prodia Widyahusada Tbk | Royal Prima vs. Sarana Meditama Metropolitan |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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