Correlation Between Semen Baturaja and Steel Pipe
Can any of the company-specific risk be diversified away by investing in both Semen Baturaja and Steel Pipe 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 Semen Baturaja and Steel Pipe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semen Baturaja Persero and Steel Pipe Industry, you can compare the effects of market volatilities on Semen Baturaja and Steel Pipe 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 Semen Baturaja with a short position of Steel Pipe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semen Baturaja and Steel Pipe.
Diversification Opportunities for Semen Baturaja and Steel Pipe
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Semen and Steel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Semen Baturaja Persero and Steel Pipe Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Pipe Industry and Semen Baturaja 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 Semen Baturaja Persero are associated (or correlated) with Steel Pipe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Pipe Industry has no effect on the direction of Semen Baturaja i.e., Semen Baturaja and Steel Pipe go up and down completely randomly.
Pair Corralation between Semen Baturaja and Steel Pipe
Assuming the 90 days trading horizon Semen Baturaja Persero is expected to under-perform the Steel Pipe. In addition to that, Semen Baturaja is 1.67 times more volatile than Steel Pipe Industry. It trades about -0.06 of its total potential returns per unit of risk. Steel Pipe Industry is currently generating about 0.02 per unit of volatility. If you would invest 26,970 in Steel Pipe Industry on August 26, 2024 and sell it today you would earn a total of 1,630 from holding Steel Pipe Industry or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semen Baturaja Persero vs. Steel Pipe Industry
Performance |
| Timeline |
| Semen Baturaja Persero |
| Steel Pipe Industry |
Semen Baturaja and Steel Pipe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semen Baturaja and Steel Pipe
The main advantage of trading using opposite Semen Baturaja and Steel Pipe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semen Baturaja position performs unexpectedly, Steel Pipe 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 Steel Pipe will offset losses from the drop in Steel Pipe's long position.| Semen Baturaja vs. Kedaung Indah Can | Semen Baturaja vs. Langgeng Makmur Industri | Semen Baturaja vs. Kabelindo Murni Tbk | Semen Baturaja vs. Mustika Ratu Tbk |
| Steel Pipe vs. Semen Baturaja Persero | Steel Pipe vs. Bekasi Fajar Industrial | Steel Pipe vs. Krakatau Steel Persero | Steel Pipe vs. Saranacentral Bajatama 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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