Correlation Between Sarana Meditama and PT Soho
Can any of the company-specific risk be diversified away by investing in both Sarana Meditama and PT Soho 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 PT Soho 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 PT Soho Global, you can compare the effects of market volatilities on Sarana Meditama and PT Soho 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 PT Soho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarana Meditama and PT Soho.
Diversification Opportunities for Sarana Meditama and PT Soho
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sarana and SOHO is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sarana Meditama Metropolitan and PT Soho Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Soho Global 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 PT Soho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Soho Global has no effect on the direction of Sarana Meditama i.e., Sarana Meditama and PT Soho go up and down completely randomly.
Pair Corralation between Sarana Meditama and PT Soho
Assuming the 90 days trading horizon Sarana Meditama is expected to generate 8.68 times less return on investment than PT Soho. In addition to that, Sarana Meditama is 1.1 times more volatile than PT Soho Global. It trades about 0.01 of its total potential returns per unit of risk. PT Soho Global is currently generating about 0.1 per unit of volatility. If you would invest 49,118 in PT Soho Global on August 24, 2024 and sell it today you would earn a total of 19,882 from holding PT Soho Global or generate 40.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sarana Meditama Metropolitan vs. PT Soho Global
Performance |
| Timeline |
| Sarana Meditama Metr |
| PT Soho Global |
Sarana Meditama and PT Soho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarana Meditama and PT Soho
The main advantage of trading using opposite Sarana Meditama and PT Soho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarana Meditama position performs unexpectedly, PT Soho 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 PT Soho will offset losses from the drop in PT Soho's long position.| Sarana Meditama vs. Mitra Keluarga Karyasehat | Sarana Meditama vs. Matahari Department Store | Sarana Meditama vs. Surya Citra Media | Sarana Meditama vs. Sawit Sumbermas Sarana |
| PT Soho vs. Phapros Tbk PT | PT Soho vs. Prodia Widyahusada Tbk | PT Soho vs. Sarana Meditama Metropolitan | PT Soho vs. Metro Healthcare Indonesia |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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