Correlation Between Semen Baturaja and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Semen Baturaja and Timah Persero 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 Timah Persero 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 Timah Persero Tbk, you can compare the effects of market volatilities on Semen Baturaja and Timah Persero 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 Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semen Baturaja and Timah Persero.
Diversification Opportunities for Semen Baturaja and Timah Persero
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Semen and Timah is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Semen Baturaja Persero and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero Tbk 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 Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Semen Baturaja i.e., Semen Baturaja and Timah Persero go up and down completely randomly.
Pair Corralation between Semen Baturaja and Timah Persero
Assuming the 90 days trading horizon Semen Baturaja Persero is expected to generate 0.34 times more return on investment than Timah Persero. However, Semen Baturaja Persero is 2.92 times less risky than Timah Persero. It trades about -0.51 of its potential returns per unit of risk. Timah Persero Tbk is currently generating about -0.29 per unit of risk. If you would invest 24,000 in Semen Baturaja Persero on September 4, 2024 and sell it today you would lose (3,400) from holding Semen Baturaja Persero or give up 14.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semen Baturaja Persero vs. Timah Persero Tbk
Performance |
| Timeline |
| Semen Baturaja Persero |
| Timah Persero Tbk |
Semen Baturaja and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semen Baturaja and Timah Persero
The main advantage of trading using opposite Semen Baturaja and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semen Baturaja position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero's long position.| Semen Baturaja vs. Timah Persero Tbk | Semen Baturaja vs. Semen Indonesia Persero | Semen Baturaja vs. Mitra Pinasthika Mustika | Semen Baturaja vs. Jakarta Int Hotels |
| Timah Persero vs. Vale Indonesia Tbk | Timah Persero vs. Aneka Tambang Persero | Timah Persero vs. Bukit Asam Tbk | Timah Persero vs. Perusahaan Gas Negara |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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