Correlation Between PT Sreeya and Indo Acidatama
Can any of the company-specific risk be diversified away by investing in both PT Sreeya and Indo Acidatama 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 PT Sreeya and Indo Acidatama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Sreeya Sewu and Indo Acidatama Tbk, you can compare the effects of market volatilities on PT Sreeya and Indo Acidatama 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 PT Sreeya with a short position of Indo Acidatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sreeya and Indo Acidatama.
Diversification Opportunities for PT Sreeya and Indo Acidatama
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SIPD and Indo is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PT Sreeya Sewu and Indo Acidatama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Acidatama Tbk and PT Sreeya 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 PT Sreeya Sewu are associated (or correlated) with Indo Acidatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Acidatama Tbk has no effect on the direction of PT Sreeya i.e., PT Sreeya and Indo Acidatama go up and down completely randomly.
Pair Corralation between PT Sreeya and Indo Acidatama
Assuming the 90 days trading horizon PT Sreeya Sewu is expected to generate 1.87 times more return on investment than Indo Acidatama. However, PT Sreeya is 1.87 times more volatile than Indo Acidatama Tbk. It trades about -0.01 of its potential returns per unit of risk. Indo Acidatama Tbk is currently generating about -0.03 per unit of risk. If you would invest 97,000 in PT Sreeya Sewu on November 5, 2024 and sell it today you would lose (15,500) from holding PT Sreeya Sewu or give up 15.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.57% |
| Values | Daily Returns |
PT Sreeya Sewu vs. Indo Acidatama Tbk
Performance |
| Timeline |
| PT Sreeya Sewu |
| Indo Acidatama Tbk |
PT Sreeya and Indo Acidatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Sreeya and Indo Acidatama
The main advantage of trading using opposite PT Sreeya and Indo Acidatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Sreeya position performs unexpectedly, Indo Acidatama 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 Indo Acidatama will offset losses from the drop in Indo Acidatama's long position.| PT Sreeya vs. Central Proteina Prima | PT Sreeya vs. Kawasan Industri Jababeka | PT Sreeya vs. Tunas Baru Lampung | PT Sreeya vs. Slj Global Tbk |
| Indo Acidatama vs. PT Sreeya Sewu | Indo Acidatama vs. Trias Sentosa Tbk | Indo Acidatama vs. Slj Global Tbk | Indo Acidatama vs. Suparma 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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