Correlation Between Salim Ivomas and Sawit Sumbermas
Can any of the company-specific risk be diversified away by investing in both Salim Ivomas and Sawit Sumbermas 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 Salim Ivomas and Sawit Sumbermas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salim Ivomas Pratama and Sawit Sumbermas Sarana, you can compare the effects of market volatilities on Salim Ivomas and Sawit Sumbermas 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 Salim Ivomas with a short position of Sawit Sumbermas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salim Ivomas and Sawit Sumbermas.
Diversification Opportunities for Salim Ivomas and Sawit Sumbermas
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Salim and Sawit is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Salim Ivomas Pratama and Sawit Sumbermas Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sawit Sumbermas Sarana and Salim Ivomas 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 Salim Ivomas Pratama are associated (or correlated) with Sawit Sumbermas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sawit Sumbermas Sarana has no effect on the direction of Salim Ivomas i.e., Salim Ivomas and Sawit Sumbermas go up and down completely randomly.
Pair Corralation between Salim Ivomas and Sawit Sumbermas
Assuming the 90 days trading horizon Salim Ivomas is expected to generate 35.87 times less return on investment than Sawit Sumbermas. But when comparing it to its historical volatility, Salim Ivomas Pratama is 5.85 times less risky than Sawit Sumbermas. It trades about 0.03 of its potential returns per unit of risk. Sawit Sumbermas Sarana is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 106,000 in Sawit Sumbermas Sarana on October 26, 2024 and sell it today you would earn a total of 22,500 from holding Sawit Sumbermas Sarana or generate 21.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Salim Ivomas Pratama vs. Sawit Sumbermas Sarana
Performance |
Timeline |
Salim Ivomas Pratama |
Sawit Sumbermas Sarana |
Salim Ivomas and Sawit Sumbermas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Salim Ivomas and Sawit Sumbermas
The main advantage of trading using opposite Salim Ivomas and Sawit Sumbermas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salim Ivomas position performs unexpectedly, Sawit Sumbermas 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 Sawit Sumbermas will offset losses from the drop in Sawit Sumbermas' long position.Salim Ivomas vs. Alam Sutera Realty | Salim Ivomas vs. Sentul City Tbk | Salim Ivomas vs. Gajah Tunggal Tbk | Salim Ivomas vs. Akr Corporindo 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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