Correlation Between Sumber Mas and Pratama Widya
Can any of the company-specific risk be diversified away by investing in both Sumber Mas and Pratama Widya 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 Sumber Mas and Pratama Widya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Mas Konstruksi and Pratama Widya Tbk, you can compare the effects of market volatilities on Sumber Mas and Pratama Widya 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 Sumber Mas with a short position of Pratama Widya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Mas and Pratama Widya.
Diversification Opportunities for Sumber Mas and Pratama Widya
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumber and Pratama is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Mas Konstruksi and Pratama Widya Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pratama Widya Tbk and Sumber Mas 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 Sumber Mas Konstruksi are associated (or correlated) with Pratama Widya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pratama Widya Tbk has no effect on the direction of Sumber Mas i.e., Sumber Mas and Pratama Widya go up and down completely randomly.
Pair Corralation between Sumber Mas and Pratama Widya
Assuming the 90 days trading horizon Sumber Mas Konstruksi is expected to under-perform the Pratama Widya. In addition to that, Sumber Mas is 5.21 times more volatile than Pratama Widya Tbk. It trades about -0.23 of its total potential returns per unit of risk. Pratama Widya Tbk is currently generating about -0.27 per unit of volatility. If you would invest 92,000 in Pratama Widya Tbk on November 3, 2024 and sell it today you would lose (7,500) from holding Pratama Widya Tbk or give up 8.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.37% |
| Values | Daily Returns |
Sumber Mas Konstruksi vs. Pratama Widya Tbk
Performance |
| Timeline |
| Sumber Mas Konstruksi |
| Pratama Widya Tbk |
Sumber Mas and Pratama Widya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Mas and Pratama Widya
The main advantage of trading using opposite Sumber Mas and Pratama Widya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Mas position performs unexpectedly, Pratama Widya 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 Pratama Widya will offset losses from the drop in Pratama Widya's long position.| Sumber Mas vs. Wahana Inti MakmurTbk | Sumber Mas vs. Sumber Tani Agung | Sumber Mas vs. Nanotech Indonesia Global | Sumber Mas vs. RMK Energy PT |
| Pratama Widya vs. Kencana Energi Lestari | Pratama Widya vs. Pelita Samudera Shipping | Pratama Widya vs. Paramita Bangun Sarana | Pratama Widya vs. Dana Brata Luhur |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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