Correlation Between Siloam International and Prodia Widyahusada
Can any of the company-specific risk be diversified away by investing in both Siloam International and Prodia Widyahusada 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 Siloam International and Prodia Widyahusada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siloam International Hospitals and Prodia Widyahusada Tbk, you can compare the effects of market volatilities on Siloam International and Prodia Widyahusada 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 Siloam International with a short position of Prodia Widyahusada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siloam International and Prodia Widyahusada.
Diversification Opportunities for Siloam International and Prodia Widyahusada
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Siloam and Prodia is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Siloam International Hospitals and Prodia Widyahusada Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodia Widyahusada Tbk and Siloam International 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 Siloam International Hospitals are associated (or correlated) with Prodia Widyahusada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodia Widyahusada Tbk has no effect on the direction of Siloam International i.e., Siloam International and Prodia Widyahusada go up and down completely randomly.
Pair Corralation between Siloam International and Prodia Widyahusada
Assuming the 90 days trading horizon Siloam International Hospitals is expected to generate 4.29 times more return on investment than Prodia Widyahusada. However, Siloam International is 4.29 times more volatile than Prodia Widyahusada Tbk. It trades about 0.02 of its potential returns per unit of risk. Prodia Widyahusada Tbk is currently generating about -0.16 per unit of risk. If you would invest 307,000 in Siloam International Hospitals on August 29, 2024 and sell it today you would lose (5,000) from holding Siloam International Hospitals or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siloam International Hospitals vs. Prodia Widyahusada Tbk
Performance |
| Timeline |
| Siloam International |
| Prodia Widyahusada Tbk |
Siloam International and Prodia Widyahusada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siloam International and Prodia Widyahusada
The main advantage of trading using opposite Siloam International and Prodia Widyahusada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siloam International position performs unexpectedly, Prodia Widyahusada 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 Prodia Widyahusada will offset losses from the drop in Prodia Widyahusada's long position.| Siloam International vs. Astra Graphia Tbk | Siloam International vs. Hexindo Adiperkasa Tbk | Siloam International vs. Lautan Luas Tbk | Siloam International vs. Citra Marga Nusaphala |
| Prodia Widyahusada vs. Astra Graphia Tbk | Prodia Widyahusada vs. Hexindo Adiperkasa Tbk | Prodia Widyahusada vs. Lautan Luas Tbk | Prodia Widyahusada vs. Citra Marga Nusaphala |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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