Correlation Between Sekar Laut and Pyridam Farma
Can any of the company-specific risk be diversified away by investing in both Sekar Laut and Pyridam Farma 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 Laut and Pyridam Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sekar Laut Tbk and Pyridam Farma Tbk, you can compare the effects of market volatilities on Sekar Laut and Pyridam Farma 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 Laut with a short position of Pyridam Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekar Laut and Pyridam Farma.
Diversification Opportunities for Sekar Laut and Pyridam Farma
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sekar and Pyridam is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sekar Laut Tbk and Pyridam Farma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyridam Farma Tbk and Sekar Laut 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 Laut Tbk are associated (or correlated) with Pyridam Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyridam Farma Tbk has no effect on the direction of Sekar Laut i.e., Sekar Laut and Pyridam Farma go up and down completely randomly.
Pair Corralation between Sekar Laut and Pyridam Farma
Assuming the 90 days trading horizon Sekar Laut Tbk is expected to under-perform the Pyridam Farma. In addition to that, Sekar Laut is 1.57 times more volatile than Pyridam Farma Tbk. It trades about -0.09 of its total potential returns per unit of risk. Pyridam Farma Tbk is currently generating about -0.01 per unit of volatility. If you would invest 27,400 in Pyridam Farma Tbk on September 2, 2024 and sell it today you would lose (1,400) from holding Pyridam Farma Tbk or give up 5.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekar Laut Tbk vs. Pyridam Farma Tbk
Performance |
| Timeline |
| Sekar Laut Tbk |
| Pyridam Farma Tbk |
Sekar Laut and Pyridam Farma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekar Laut and Pyridam Farma
The main advantage of trading using opposite Sekar Laut and Pyridam Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekar Laut position performs unexpectedly, Pyridam Farma 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 Pyridam Farma will offset losses from the drop in Pyridam Farma's long position.| Sekar Laut vs. Siantar Top Tbk | Sekar Laut vs. Prasidha Aneka Niaga | Sekar Laut vs. Mandom Indonesia Tbk | Sekar Laut vs. Pyridam Farma 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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