Correlation Between Summarecon Agung and Ramayana Lestari
Can any of the company-specific risk be diversified away by investing in both Summarecon Agung and Ramayana Lestari 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 Summarecon Agung and Ramayana Lestari into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summarecon Agung Tbk and Ramayana Lestari Sentosa, you can compare the effects of market volatilities on Summarecon Agung and Ramayana Lestari 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 Summarecon Agung with a short position of Ramayana Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summarecon Agung and Ramayana Lestari.
Diversification Opportunities for Summarecon Agung and Ramayana Lestari
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summarecon and Ramayana is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Summarecon Agung Tbk and Ramayana Lestari Sentosa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramayana Lestari Sentosa and Summarecon Agung 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 Summarecon Agung Tbk are associated (or correlated) with Ramayana Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramayana Lestari Sentosa has no effect on the direction of Summarecon Agung i.e., Summarecon Agung and Ramayana Lestari go up and down completely randomly.
Pair Corralation between Summarecon Agung and Ramayana Lestari
Assuming the 90 days trading horizon Summarecon Agung Tbk is expected to generate 1.5 times more return on investment than Ramayana Lestari. However, Summarecon Agung is 1.5 times more volatile than Ramayana Lestari Sentosa. It trades about -0.01 of its potential returns per unit of risk. Ramayana Lestari Sentosa is currently generating about -0.06 per unit of risk. If you would invest 59,762 in Summarecon Agung Tbk on November 5, 2024 and sell it today you would lose (13,562) from holding Summarecon Agung Tbk or give up 22.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summarecon Agung Tbk vs. Ramayana Lestari Sentosa
Performance |
| Timeline |
| Summarecon Agung Tbk |
| Ramayana Lestari Sentosa |
Summarecon Agung and Ramayana Lestari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summarecon Agung and Ramayana Lestari
The main advantage of trading using opposite Summarecon Agung and Ramayana Lestari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summarecon Agung position performs unexpectedly, Ramayana Lestari 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 Ramayana Lestari will offset losses from the drop in Ramayana Lestari's long position.| Summarecon Agung vs. Ciputra Development Tbk | Summarecon Agung vs. Bumi Serpong Damai | Summarecon Agung vs. Alam Sutera Realty | Summarecon Agung vs. Lippo Karawaci Tbk |
| Ramayana Lestari vs. Mitra Adiperkasa Tbk | Ramayana Lestari vs. Matahari Putra Prima | Ramayana Lestari vs. Summarecon Agung Tbk | Ramayana Lestari vs. Ciputra Development 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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