Correlation Between Sinar Mas and Alam Sutera
Can any of the company-specific risk be diversified away by investing in both Sinar Mas and Alam Sutera 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 Sinar Mas and Alam Sutera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinar Mas Agro and Alam Sutera Realty, you can compare the effects of market volatilities on Sinar Mas and Alam Sutera 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 Sinar Mas with a short position of Alam Sutera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinar Mas and Alam Sutera.
Diversification Opportunities for Sinar Mas and Alam Sutera
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinar and Alam is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sinar Mas Agro and Alam Sutera Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alam Sutera Realty and Sinar Mas 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 Sinar Mas Agro are associated (or correlated) with Alam Sutera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alam Sutera Realty has no effect on the direction of Sinar Mas i.e., Sinar Mas and Alam Sutera go up and down completely randomly.
Pair Corralation between Sinar Mas and Alam Sutera
Assuming the 90 days trading horizon Sinar Mas Agro is expected to generate 0.48 times more return on investment than Alam Sutera. However, Sinar Mas Agro is 2.06 times less risky than Alam Sutera. It trades about 0.12 of its potential returns per unit of risk. Alam Sutera Realty is currently generating about 0.0 per unit of risk. If you would invest 358,000 in Sinar Mas Agro on November 4, 2024 and sell it today you would earn a total of 10,000 from holding Sinar Mas Agro or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinar Mas Agro vs. Alam Sutera Realty
Performance |
| Timeline |
| Sinar Mas Agro |
| Alam Sutera Realty |
Sinar Mas and Alam Sutera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinar Mas and Alam Sutera
The main advantage of trading using opposite Sinar Mas and Alam Sutera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinar Mas position performs unexpectedly, Alam Sutera 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 Alam Sutera will offset losses from the drop in Alam Sutera's long position.| Sinar Mas vs. Salim Ivomas Pratama | Sinar Mas vs. Sawit Sumbermas Sarana | Sinar Mas vs. Austindo Nusantara Jaya | Sinar Mas vs. Provident Agro Tbk |
| Alam Sutera vs. Bumi Serpong Damai | Alam Sutera vs. Summarecon Agung Tbk | Alam Sutera vs. Lippo Karawaci Tbk | Alam Sutera vs. Ciputra Development 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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