Correlation Between Sekar Bumi and Siantar Top
Can any of the company-specific risk be diversified away by investing in both Sekar Bumi and Siantar Top 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 Siantar Top 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 Siantar Top Tbk, you can compare the effects of market volatilities on Sekar Bumi and Siantar Top 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 Siantar Top. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekar Bumi and Siantar Top.
Diversification Opportunities for Sekar Bumi and Siantar Top
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sekar and Siantar is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sekar Bumi Tbk and Siantar Top Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siantar Top Tbk 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 Siantar Top. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siantar Top Tbk has no effect on the direction of Sekar Bumi i.e., Sekar Bumi and Siantar Top go up and down completely randomly.
Pair Corralation between Sekar Bumi and Siantar Top
Assuming the 90 days trading horizon Sekar Bumi Tbk is expected to under-perform the Siantar Top. In addition to that, Sekar Bumi is 1.59 times more volatile than Siantar Top Tbk. It trades about -0.53 of its total potential returns per unit of risk. Siantar Top Tbk is currently generating about -0.37 per unit of volatility. If you would invest 1,430,000 in Siantar Top Tbk on September 3, 2024 and sell it today you would lose (77,500) from holding Siantar Top Tbk or give up 5.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekar Bumi Tbk vs. Siantar Top Tbk
Performance |
| Timeline |
| Sekar Bumi Tbk |
| Siantar Top Tbk |
Sekar Bumi and Siantar Top Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekar Bumi and Siantar Top
The main advantage of trading using opposite Sekar Bumi and Siantar Top positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekar Bumi position performs unexpectedly, Siantar Top 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 Siantar Top will offset losses from the drop in Siantar Top'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 |
| Siantar Top vs. Sekar Laut Tbk | Siantar Top vs. Prasidha Aneka Niaga | Siantar Top vs. Mandom Indonesia Tbk | Siantar Top vs. Multi Bintang Indonesia |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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