Correlation Between Sumber Global and Baramulti Suksessarana
Can any of the company-specific risk be diversified away by investing in both Sumber Global and Baramulti Suksessarana 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 Sumber Global and Baramulti Suksessarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Global Energy and Baramulti Suksessarana Tbk, you can compare the effects of market volatilities on Sumber Global and Baramulti Suksessarana 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 Sumber Global with a short position of Baramulti Suksessarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Global and Baramulti Suksessarana.
Diversification Opportunities for Sumber Global and Baramulti Suksessarana
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sumber and Baramulti is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Global Energy and Baramulti Suksessarana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baramulti Suksessarana and Sumber Global 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 Sumber Global Energy are associated (or correlated) with Baramulti Suksessarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baramulti Suksessarana has no effect on the direction of Sumber Global i.e., Sumber Global and Baramulti Suksessarana go up and down completely randomly.
Pair Corralation between Sumber Global and Baramulti Suksessarana
Assuming the 90 days trading horizon Sumber Global Energy is expected to under-perform the Baramulti Suksessarana. In addition to that, Sumber Global is 3.19 times more volatile than Baramulti Suksessarana Tbk. It trades about -0.06 of its total potential returns per unit of risk. Baramulti Suksessarana Tbk is currently generating about 0.12 per unit of volatility. If you would invest 350,366 in Baramulti Suksessarana Tbk on September 1, 2024 and sell it today you would earn a total of 65,634 from holding Baramulti Suksessarana Tbk or generate 18.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sumber Global Energy vs. Baramulti Suksessarana Tbk
Performance |
| Timeline |
| Sumber Global Energy |
| Baramulti Suksessarana |
Sumber Global and Baramulti Suksessarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Global and Baramulti Suksessarana
The main advantage of trading using opposite Sumber Global and Baramulti Suksessarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Global position performs unexpectedly, Baramulti Suksessarana 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 Baramulti Suksessarana will offset losses from the drop in Baramulti Suksessarana's long position.| Sumber Global vs. Golden Eagle Energy | Sumber Global vs. Baramulti Suksessarana Tbk | Sumber Global vs. TBS Energi Utama | Sumber Global vs. Resource Alam Indonesia |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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