Correlation Between Sinar Mas and Trimegah Securities
Can any of the company-specific risk be diversified away by investing in both Sinar Mas and Trimegah Securities 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 Sinar Mas and Trimegah Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinar Mas Multiartha and Trimegah Securities Tbk, you can compare the effects of market volatilities on Sinar Mas and Trimegah Securities 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 Sinar Mas with a short position of Trimegah Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinar Mas and Trimegah Securities.
Diversification Opportunities for Sinar Mas and Trimegah Securities
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sinar and Trimegah is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sinar Mas Multiartha and Trimegah Securities Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Securities Tbk and Sinar 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 Sinar Mas Multiartha are associated (or correlated) with Trimegah Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Securities Tbk has no effect on the direction of Sinar Mas i.e., Sinar Mas and Trimegah Securities go up and down completely randomly.
Pair Corralation between Sinar Mas and Trimegah Securities
Assuming the 90 days trading horizon Sinar Mas is expected to generate 2.03 times less return on investment than Trimegah Securities. But when comparing it to its historical volatility, Sinar Mas Multiartha is 1.05 times less risky than Trimegah Securities. It trades about 0.03 of its potential returns per unit of risk. Trimegah Securities Tbk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 24,400 in Trimegah Securities Tbk on August 27, 2024 and sell it today you would earn a total of 11,800 from holding Trimegah Securities Tbk or generate 48.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.77% |
| Values | Daily Returns |
Sinar Mas Multiartha vs. Trimegah Securities Tbk
Performance |
| Timeline |
| Sinar Mas Multiartha |
| Trimegah Securities Tbk |
Sinar Mas and Trimegah Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinar Mas and Trimegah Securities
The main advantage of trading using opposite Sinar Mas and Trimegah Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinar Mas position performs unexpectedly, Trimegah Securities 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 Trimegah Securities will offset losses from the drop in Trimegah Securities' long position.| Sinar Mas vs. Bank Mega Tbk | Sinar Mas vs. Trimegah Securities Tbk | Sinar Mas vs. Paninvest Tbk | Sinar Mas vs. Sinar Mas Agro |
| Trimegah Securities vs. Wahana Ottomitra Multiartha | Trimegah Securities vs. Paninvest Tbk | Trimegah Securities vs. Sinar Mas Multiartha | Trimegah Securities vs. Trias Sentosa Tbk |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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