Correlation Between Surya Citra and Hoffmen Cleanindo
Can any of the company-specific risk be diversified away by investing in both Surya Citra and Hoffmen Cleanindo 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 Citra and Hoffmen Cleanindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surya Citra Media and Hoffmen Cleanindo, you can compare the effects of market volatilities on Surya Citra and Hoffmen Cleanindo 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 Citra with a short position of Hoffmen Cleanindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Citra and Hoffmen Cleanindo.
Diversification Opportunities for Surya Citra and Hoffmen Cleanindo
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Surya and Hoffmen is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Surya Citra Media and Hoffmen Cleanindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoffmen Cleanindo and Surya Citra 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 Citra Media are associated (or correlated) with Hoffmen Cleanindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoffmen Cleanindo has no effect on the direction of Surya Citra i.e., Surya Citra and Hoffmen Cleanindo go up and down completely randomly.
Pair Corralation between Surya Citra and Hoffmen Cleanindo
Assuming the 90 days trading horizon Surya Citra Media is expected to under-perform the Hoffmen Cleanindo. But the stock apears to be less risky and, when comparing its historical volatility, Surya Citra Media is 1.11 times less risky than Hoffmen Cleanindo. The stock trades about 0.0 of its potential returns per unit of risk. The Hoffmen Cleanindo is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12,200 in Hoffmen Cleanindo on September 1, 2024 and sell it today you would earn a total of 3,300 from holding Hoffmen Cleanindo or generate 27.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Surya Citra Media vs. Hoffmen Cleanindo
Performance |
Timeline |
Surya Citra Media |
Hoffmen Cleanindo |
Surya Citra and Hoffmen Cleanindo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Surya Citra and Hoffmen Cleanindo
The main advantage of trading using opposite Surya Citra and Hoffmen Cleanindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Citra position performs unexpectedly, Hoffmen Cleanindo 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 Hoffmen Cleanindo will offset losses from the drop in Hoffmen Cleanindo's long position.Surya Citra vs. Media Nusantara Citra | Surya Citra vs. Matahari Department Store | Surya Citra vs. Akr Corporindo Tbk | Surya Citra vs. XL Axiata 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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