Correlation Between Surya Biru and Indo Oil
Can any of the company-specific risk be diversified away by investing in both Surya Biru and Indo Oil 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 Surya Biru and Indo Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surya Biru Murni and Indo Oil Perkasa, you can compare the effects of market volatilities on Surya Biru and Indo Oil 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 Surya Biru with a short position of Indo Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Biru and Indo Oil.
Diversification Opportunities for Surya Biru and Indo Oil
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Surya and Indo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Surya Biru Murni and Indo Oil Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Oil Perkasa and Surya Biru 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 Surya Biru Murni are associated (or correlated) with Indo Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Oil Perkasa has no effect on the direction of Surya Biru i.e., Surya Biru and Indo Oil go up and down completely randomly.
Pair Corralation between Surya Biru and Indo Oil
Assuming the 90 days trading horizon Surya Biru Murni is expected to generate 1.11 times more return on investment than Indo Oil. However, Surya Biru is 1.11 times more volatile than Indo Oil Perkasa. It trades about 0.01 of its potential returns per unit of risk. Indo Oil Perkasa is currently generating about -0.13 per unit of risk. If you would invest 12,900 in Surya Biru Murni on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Surya Biru Murni or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surya Biru Murni vs. Indo Oil Perkasa
Performance |
| Timeline |
| Surya Biru Murni |
| Indo Oil Perkasa |
Surya Biru and Indo Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surya Biru and Indo Oil
The main advantage of trading using opposite Surya Biru and Indo Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Biru position performs unexpectedly, Indo Oil 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 Indo Oil will offset losses from the drop in Indo Oil's long position.| Surya Biru vs. Indo Oil Perkasa | Surya Biru vs. Archi Indonesia Tbk | Surya Biru vs. Nusa Palapa Gemilang | Surya Biru vs. Obm Drilchem PT |
| Indo Oil vs. Buyung Poetra Sembada | Indo Oil vs. Garudafood Putra Putri | Indo Oil vs. Campina Ice Cream | Indo Oil vs. Wijaya Karya Bangunan |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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