Correlation Between Sinar Mas and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Sinar Mas and Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on Sinar Mas and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinar Mas and Trias Sentosa.
Diversification Opportunities for Sinar Mas and Trias Sentosa
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sinar and Trias is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sinar Mas Multiartha and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Sinar Mas i.e., Sinar Mas and Trias Sentosa go up and down completely randomly.
Pair Corralation between Sinar Mas and Trias Sentosa
Assuming the 90 days trading horizon Sinar Mas is expected to generate 2.32 times less return on investment than Trias Sentosa. But when comparing it to its historical volatility, Sinar Mas Multiartha is 2.69 times less risky than Trias Sentosa. It trades about 0.02 of its potential returns per unit of risk. Trias Sentosa Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 47,200 in Trias Sentosa Tbk on December 11, 2024 and sell it today you would earn a total of 2,800 from holding Trias Sentosa Tbk or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinar Mas Multiartha vs. Trias Sentosa Tbk
Performance |
| Timeline |
| Sinar Mas Multiartha |
| Trias Sentosa Tbk |
Sinar Mas and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinar Mas and Trias Sentosa
The main advantage of trading using opposite Sinar Mas and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinar Mas position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa's long position.| Sinar Mas vs. Bank Mega Tbk | ||
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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