Correlation Between Samudera Indonesia and Buana Listya
Can any of the company-specific risk be diversified away by investing in both Samudera Indonesia and Buana Listya 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 Samudera Indonesia and Buana Listya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samudera Indonesia Tbk and Buana Listya Tama, you can compare the effects of market volatilities on Samudera Indonesia and Buana Listya 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 Samudera Indonesia with a short position of Buana Listya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samudera Indonesia and Buana Listya.
Diversification Opportunities for Samudera Indonesia and Buana Listya
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samudera and Buana is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samudera Indonesia Tbk and Buana Listya Tama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buana Listya Tama and Samudera Indonesia 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 Samudera Indonesia Tbk are associated (or correlated) with Buana Listya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buana Listya Tama has no effect on the direction of Samudera Indonesia i.e., Samudera Indonesia and Buana Listya go up and down completely randomly.
Pair Corralation between Samudera Indonesia and Buana Listya
Assuming the 90 days trading horizon Samudera Indonesia Tbk is expected to under-perform the Buana Listya. But the stock apears to be less risky and, when comparing its historical volatility, Samudera Indonesia Tbk is 1.43 times less risky than Buana Listya. The stock trades about -0.08 of its potential returns per unit of risk. The Buana Listya Tama is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 11,400 in Buana Listya Tama on September 12, 2024 and sell it today you would earn a total of 800.00 from holding Buana Listya Tama or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Samudera Indonesia Tbk vs. Buana Listya Tama
Performance |
| Timeline |
| Samudera Indonesia Tbk |
| Buana Listya Tama |
Samudera Indonesia and Buana Listya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samudera Indonesia and Buana Listya
The main advantage of trading using opposite Samudera Indonesia and Buana Listya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samudera Indonesia position performs unexpectedly, Buana Listya 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 Buana Listya will offset losses from the drop in Buana Listya's long position.| Samudera Indonesia vs. PT Temas Tbk | Samudera Indonesia vs. Petrosea Tbk | Samudera Indonesia vs. Rig Tenders Tbk | Samudera Indonesia vs. Rukun Raharja Tbk |
| Buana Listya vs. Galva Technologies Tbk | Buana Listya vs. Trinitan Metals and | Buana Listya vs. Siloam International Hospitals | Buana Listya vs. PT UBC Medical |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |