Correlation Between Saraswanti Anugerah and Kencana Energi
Can any of the company-specific risk be diversified away by investing in both Saraswanti Anugerah and Kencana Energi 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 Saraswanti Anugerah and Kencana Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saraswanti Anugerah Makmur and Kencana Energi Lestari, you can compare the effects of market volatilities on Saraswanti Anugerah and Kencana Energi 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 Saraswanti Anugerah with a short position of Kencana Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saraswanti Anugerah and Kencana Energi.
Diversification Opportunities for Saraswanti Anugerah and Kencana Energi
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saraswanti and Kencana is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Saraswanti Anugerah Makmur and Kencana Energi Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kencana Energi Lestari and Saraswanti Anugerah 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 Saraswanti Anugerah Makmur are associated (or correlated) with Kencana Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kencana Energi Lestari has no effect on the direction of Saraswanti Anugerah i.e., Saraswanti Anugerah and Kencana Energi go up and down completely randomly.
Pair Corralation between Saraswanti Anugerah and Kencana Energi
Assuming the 90 days trading horizon Saraswanti Anugerah Makmur is expected to generate 1.02 times more return on investment than Kencana Energi. However, Saraswanti Anugerah is 1.02 times more volatile than Kencana Energi Lestari. It trades about 0.03 of its potential returns per unit of risk. Kencana Energi Lestari is currently generating about -0.04 per unit of risk. If you would invest 73,177 in Saraswanti Anugerah Makmur on September 14, 2024 and sell it today you would earn a total of 6,823 from holding Saraswanti Anugerah Makmur or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saraswanti Anugerah Makmur vs. Kencana Energi Lestari
Performance |
| Timeline |
| Saraswanti Anugerah |
| Kencana Energi Lestari |
Saraswanti Anugerah and Kencana Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saraswanti Anugerah and Kencana Energi
The main advantage of trading using opposite Saraswanti Anugerah and Kencana Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saraswanti Anugerah position performs unexpectedly, Kencana Energi 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 Kencana Energi will offset losses from the drop in Kencana Energi's long position.| Saraswanti Anugerah vs. Panca Budi Idaman | Saraswanti Anugerah vs. Gunung Raja Paksi | Saraswanti Anugerah vs. Aneka Gas Industri | Saraswanti Anugerah vs. Mark Dynamics Indonesia |
| Kencana Energi vs. PT Indonesia Kendaraan | Kencana Energi vs. Cikarang Listrindo Tbk | Kencana Energi vs. Jasa Armada Indonesia | Kencana Energi vs. Pelita Samudera Shipping |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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