Correlation Between Salim Ivomas and Sawit Sumbermas

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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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Salim Ivomas Pratama  vs.  Sawit Sumbermas Sarana

 Performance 
       Timeline  
Salim Ivomas Pratama 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Salim Ivomas Pratama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
Sawit Sumbermas Sarana 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Sawit Sumbermas Sarana are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sawit Sumbermas disclosed solid returns over the last few months and may actually be approaching a breakup point.

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.
The idea behind Salim Ivomas Pratama and Sawit Sumbermas Sarana pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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