Correlation Between Sekar Bumi and Prasidha Aneka
Can any of the company-specific risk be diversified away by investing in both Sekar Bumi and Prasidha Aneka 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 Sekar Bumi and Prasidha Aneka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sekar Bumi Tbk and Prasidha Aneka Niaga, you can compare the effects of market volatilities on Sekar Bumi and Prasidha Aneka 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 Sekar Bumi with a short position of Prasidha Aneka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekar Bumi and Prasidha Aneka.
Diversification Opportunities for Sekar Bumi and Prasidha Aneka
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sekar and Prasidha is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sekar Bumi Tbk and Prasidha Aneka Niaga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prasidha Aneka Niaga and Sekar Bumi 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 Sekar Bumi Tbk are associated (or correlated) with Prasidha Aneka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prasidha Aneka Niaga has no effect on the direction of Sekar Bumi i.e., Sekar Bumi and Prasidha Aneka go up and down completely randomly.
Pair Corralation between Sekar Bumi and Prasidha Aneka
Assuming the 90 days trading horizon Sekar Bumi Tbk is expected to under-perform the Prasidha Aneka. But the stock apears to be less risky and, when comparing its historical volatility, Sekar Bumi Tbk is 1.67 times less risky than Prasidha Aneka. The stock trades about -0.53 of its potential returns per unit of risk. The Prasidha Aneka Niaga is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 8,500 in Prasidha Aneka Niaga on September 3, 2024 and sell it today you would lose (400.00) from holding Prasidha Aneka Niaga or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekar Bumi Tbk vs. Prasidha Aneka Niaga
Performance |
| Timeline |
| Sekar Bumi Tbk |
| Prasidha Aneka Niaga |
Sekar Bumi and Prasidha Aneka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekar Bumi and Prasidha Aneka
The main advantage of trading using opposite Sekar Bumi and Prasidha Aneka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekar Bumi position performs unexpectedly, Prasidha Aneka 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 Prasidha Aneka will offset losses from the drop in Prasidha Aneka's long position.| Sekar Bumi vs. Astra International Tbk | Sekar Bumi vs. Unilever Indonesia Tbk | Sekar Bumi vs. Telkom Indonesia Tbk | Sekar Bumi vs. Bank Mandiri Persero |
| Prasidha Aneka vs. Sekar Laut Tbk | Prasidha Aneka vs. Siantar Top Tbk | Prasidha Aneka vs. Pyridam Farma Tbk | Prasidha Aneka vs. Langgeng Makmur Industri |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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