Correlation Between Supreme Cable and Semacom Integrated
Can any of the company-specific risk be diversified away by investing in both Supreme Cable and Semacom Integrated 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 Supreme Cable and Semacom Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supreme Cable Manufacturing and Semacom Integrated Tbk, you can compare the effects of market volatilities on Supreme Cable and Semacom Integrated 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 Supreme Cable with a short position of Semacom Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supreme Cable and Semacom Integrated.
Diversification Opportunities for Supreme Cable and Semacom Integrated
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Supreme and Semacom is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Supreme Cable Manufacturing and Semacom Integrated Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semacom Integrated Tbk and Supreme Cable 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 Supreme Cable Manufacturing are associated (or correlated) with Semacom Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semacom Integrated Tbk has no effect on the direction of Supreme Cable i.e., Supreme Cable and Semacom Integrated go up and down completely randomly.
Pair Corralation between Supreme Cable and Semacom Integrated
Assuming the 90 days trading horizon Supreme Cable Manufacturing is expected to under-perform the Semacom Integrated. But the stock apears to be less risky and, when comparing its historical volatility, Supreme Cable Manufacturing is 2.65 times less risky than Semacom Integrated. The stock trades about -0.35 of its potential returns per unit of risk. The Semacom Integrated Tbk is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 8,900 in Semacom Integrated Tbk on September 2, 2024 and sell it today you would lose (300.00) from holding Semacom Integrated Tbk or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supreme Cable Manufacturing vs. Semacom Integrated Tbk
Performance |
| Timeline |
| Supreme Cable Manufa |
| Semacom Integrated Tbk |
Supreme Cable and Semacom Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supreme Cable and Semacom Integrated
The main advantage of trading using opposite Supreme Cable and Semacom Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supreme Cable position performs unexpectedly, Semacom Integrated 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 Semacom Integrated will offset losses from the drop in Semacom Integrated's long position.| Supreme Cable vs. Matahari Department Store | Supreme Cable vs. Multi Medika Internasional | Supreme Cable vs. Visi Media Asia | Supreme Cable vs. Bayan Resources Tbk |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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