Correlation Between Surya Citra and Leyand International
Can any of the company-specific risk be diversified away by investing in both Surya Citra and Leyand International 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 Leyand International 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 Leyand International Tbk, you can compare the effects of market volatilities on Surya Citra and Leyand International 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 Leyand International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Citra and Leyand International.
Diversification Opportunities for Surya Citra and Leyand International
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Surya and Leyand is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Surya Citra Media and Leyand International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyand International Tbk 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 Leyand International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyand International Tbk has no effect on the direction of Surya Citra i.e., Surya Citra and Leyand International go up and down completely randomly.
Pair Corralation between Surya Citra and Leyand International
Assuming the 90 days trading horizon Surya Citra Media is expected to generate 0.85 times more return on investment than Leyand International. However, Surya Citra Media is 1.18 times less risky than Leyand International. It trades about 0.49 of its potential returns per unit of risk. Leyand International Tbk is currently generating about 0.2 per unit of risk. If you would invest 12,196 in Surya Citra Media on September 14, 2024 and sell it today you would earn a total of 7,404 from holding Surya Citra Media or generate 60.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surya Citra Media vs. Leyand International Tbk
Performance |
| Timeline |
| Surya Citra Media |
| Leyand International Tbk |
Surya Citra and Leyand International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surya Citra and Leyand International
The main advantage of trading using opposite Surya Citra and Leyand International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Citra position performs unexpectedly, Leyand International 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 Leyand International will offset losses from the drop in Leyand International'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 |
| Leyand International vs. Protech Mitra Perkasa | Leyand International vs. Alumindo Light Metal | Leyand International vs. Trinitan Metals and | Leyand International vs. Optima Prima Metal |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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