Correlation Between Samudera Indonesia and Total Bangun
Can any of the company-specific risk be diversified away by investing in both Samudera Indonesia and Total Bangun 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 Total Bangun 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 Total Bangun Persada, you can compare the effects of market volatilities on Samudera Indonesia and Total Bangun 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 Total Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samudera Indonesia and Total Bangun.
Diversification Opportunities for Samudera Indonesia and Total Bangun
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samudera and Total is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Samudera Indonesia Tbk and Total Bangun Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Bangun Persada 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 Total Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Bangun Persada has no effect on the direction of Samudera Indonesia i.e., Samudera Indonesia and Total Bangun go up and down completely randomly.
Pair Corralation between Samudera Indonesia and Total Bangun
Assuming the 90 days trading horizon Samudera Indonesia Tbk is expected to generate 0.58 times more return on investment than Total Bangun. However, Samudera Indonesia Tbk is 1.73 times less risky than Total Bangun. It trades about -0.39 of its potential returns per unit of risk. Total Bangun Persada is currently generating about -0.23 per unit of risk. If you would invest 33,600 in Samudera Indonesia Tbk on August 28, 2024 and sell it today you would lose (4,800) from holding Samudera Indonesia Tbk or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samudera Indonesia Tbk vs. Total Bangun Persada
Performance |
| Timeline |
| Samudera Indonesia Tbk |
| Total Bangun Persada |
Samudera Indonesia and Total Bangun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samudera Indonesia and Total Bangun
The main advantage of trading using opposite Samudera Indonesia and Total Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samudera Indonesia position performs unexpectedly, Total Bangun 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 Total Bangun will offset losses from the drop in Total Bangun'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 |
| Total Bangun vs. Kawasan Industri Jababeka | Total Bangun vs. Adhi Karya Persero | Total Bangun vs. Ciputra Development Tbk | Total Bangun vs. Solusi Bangun 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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