Correlation Between Samudera Indonesia and Tembaga Mulia
Can any of the company-specific risk be diversified away by investing in both Samudera Indonesia and Tembaga Mulia 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 Tembaga Mulia 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 Tembaga Mulia Semanan, you can compare the effects of market volatilities on Samudera Indonesia and Tembaga Mulia 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 Tembaga Mulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samudera Indonesia and Tembaga Mulia.
Diversification Opportunities for Samudera Indonesia and Tembaga Mulia
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samudera and Tembaga is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samudera Indonesia Tbk and Tembaga Mulia Semanan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tembaga Mulia Semanan 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 Tembaga Mulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tembaga Mulia Semanan has no effect on the direction of Samudera Indonesia i.e., Samudera Indonesia and Tembaga Mulia go up and down completely randomly.
Pair Corralation between Samudera Indonesia and Tembaga Mulia
Assuming the 90 days trading horizon Samudera Indonesia Tbk is expected to under-perform the Tembaga Mulia. But the stock apears to be less risky and, when comparing its historical volatility, Samudera Indonesia Tbk is 1.71 times less risky than Tembaga Mulia. The stock trades about -0.57 of its potential returns per unit of risk. The Tembaga Mulia Semanan is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 89,500 in Tembaga Mulia Semanan on August 25, 2024 and sell it today you would earn a total of 4,000 from holding Tembaga Mulia Semanan or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samudera Indonesia Tbk vs. Tembaga Mulia Semanan
Performance |
| Timeline |
| Samudera Indonesia Tbk |
| Tembaga Mulia Semanan |
Samudera Indonesia and Tembaga Mulia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samudera Indonesia and Tembaga Mulia
The main advantage of trading using opposite Samudera Indonesia and Tembaga Mulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samudera Indonesia position performs unexpectedly, Tembaga Mulia 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 Tembaga Mulia will offset losses from the drop in Tembaga Mulia's long position.| Samudera Indonesia vs. Rukun Raharja Tbk | Samudera Indonesia vs. PT Temas Tbk | Samudera Indonesia vs. Weha Transportasi Indonesia |
| Tembaga Mulia vs. Rukun Raharja Tbk | Tembaga Mulia vs. PT Temas Tbk | Tembaga Mulia vs. Weha Transportasi Indonesia |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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