Correlation Between Sinar Mas and Indosterling Technomedia
Can any of the company-specific risk be diversified away by investing in both Sinar Mas and Indosterling Technomedia 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 Indosterling Technomedia 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 Indosterling Technomedia Tbk, you can compare the effects of market volatilities on Sinar Mas and Indosterling Technomedia 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 Indosterling Technomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinar Mas and Indosterling Technomedia.
Diversification Opportunities for Sinar Mas and Indosterling Technomedia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sinar and Indosterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sinar Mas Agro and Indosterling Technomedia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosterling Technomedia 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 Indosterling Technomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosterling Technomedia has no effect on the direction of Sinar Mas i.e., Sinar Mas and Indosterling Technomedia go up and down completely randomly.
Pair Corralation between Sinar Mas and Indosterling Technomedia
If you would invest 365,871 in Sinar Mas Agro on September 3, 2024 and sell it today you would earn a total of 9,129 from holding Sinar Mas Agro or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinar Mas Agro vs. Indosterling Technomedia Tbk
Performance |
| Timeline |
| Sinar Mas Agro |
| Indosterling Technomedia |
Sinar Mas and Indosterling Technomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinar Mas and Indosterling Technomedia
The main advantage of trading using opposite Sinar Mas and Indosterling Technomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinar Mas position performs unexpectedly, Indosterling Technomedia 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 Indosterling Technomedia will offset losses from the drop in Indosterling Technomedia's long position.| Sinar Mas vs. Sampoerna Agro Tbk | Sinar Mas vs. Tunas Baru Lampung | Sinar Mas vs. Perusahaan Perkebunan London | Sinar Mas vs. Bakrie Sumatera Plantations |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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