Correlation Between Sidomulyo Selaras and Bali Towerindo
Can any of the company-specific risk be diversified away by investing in both Sidomulyo Selaras and Bali Towerindo 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 Sidomulyo Selaras and Bali Towerindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sidomulyo Selaras Tbk and Bali Towerindo Sentra, you can compare the effects of market volatilities on Sidomulyo Selaras and Bali Towerindo 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 Sidomulyo Selaras with a short position of Bali Towerindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidomulyo Selaras and Bali Towerindo.
Diversification Opportunities for Sidomulyo Selaras and Bali Towerindo
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sidomulyo and Bali is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sidomulyo Selaras Tbk and Bali Towerindo Sentra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bali Towerindo Sentra and Sidomulyo Selaras 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 Sidomulyo Selaras Tbk are associated (or correlated) with Bali Towerindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bali Towerindo Sentra has no effect on the direction of Sidomulyo Selaras i.e., Sidomulyo Selaras and Bali Towerindo go up and down completely randomly.
Pair Corralation between Sidomulyo Selaras and Bali Towerindo
Assuming the 90 days trading horizon Sidomulyo Selaras Tbk is expected to under-perform the Bali Towerindo. But the stock apears to be less risky and, when comparing its historical volatility, Sidomulyo Selaras Tbk is 1.1 times less risky than Bali Towerindo. The stock trades about -0.05 of its potential returns per unit of risk. The Bali Towerindo Sentra is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 74,586 in Bali Towerindo Sentra on August 24, 2024 and sell it today you would earn a total of 76,914 from holding Bali Towerindo Sentra or generate 103.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sidomulyo Selaras Tbk vs. Bali Towerindo Sentra
Performance |
| Timeline |
| Sidomulyo Selaras Tbk |
| Bali Towerindo Sentra |
Sidomulyo Selaras and Bali Towerindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidomulyo Selaras and Bali Towerindo
The main advantage of trading using opposite Sidomulyo Selaras and Bali Towerindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidomulyo Selaras position performs unexpectedly, Bali Towerindo 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 Bali Towerindo will offset losses from the drop in Bali Towerindo's long position.| Sidomulyo Selaras vs. Samudera Indonesia Tbk | Sidomulyo Selaras vs. Steady Safe TBK | Sidomulyo Selaras vs. Rukun Raharja Tbk | Sidomulyo Selaras vs. PT Temas Tbk |
| Bali Towerindo vs. Austindo Nusantara Jaya | Bali Towerindo vs. Inti Bangun Sejahtera | Bali Towerindo vs. Bukaka Teknik Utama | Bali Towerindo vs. Blue Bird Tbk |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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