Correlation Between Selamat Sempurna and Mark Dynamics
Can any of the company-specific risk be diversified away by investing in both Selamat Sempurna and Mark Dynamics 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 Selamat Sempurna and Mark Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selamat Sempurna Tbk and Mark Dynamics Indonesia, you can compare the effects of market volatilities on Selamat Sempurna and Mark Dynamics 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 Selamat Sempurna with a short position of Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selamat Sempurna and Mark Dynamics.
Diversification Opportunities for Selamat Sempurna and Mark Dynamics
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Selamat and Mark is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Selamat Sempurna Tbk and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics Indonesia and Selamat Sempurna 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 Selamat Sempurna Tbk are associated (or correlated) with Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Selamat Sempurna i.e., Selamat Sempurna and Mark Dynamics go up and down completely randomly.
Pair Corralation between Selamat Sempurna and Mark Dynamics
Assuming the 90 days trading horizon Selamat Sempurna is expected to generate 71.66 times less return on investment than Mark Dynamics. But when comparing it to its historical volatility, Selamat Sempurna Tbk is 1.11 times less risky than Mark Dynamics. It trades about 0.0 of its potential returns per unit of risk. Mark Dynamics Indonesia is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 57,474 in Mark Dynamics Indonesia on August 25, 2024 and sell it today you would earn a total of 45,526 from holding Mark Dynamics Indonesia or generate 79.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selamat Sempurna Tbk vs. Mark Dynamics Indonesia
Performance |
| Timeline |
| Selamat Sempurna Tbk |
| Mark Dynamics Indonesia |
Selamat Sempurna and Mark Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selamat Sempurna and Mark Dynamics
The main advantage of trading using opposite Selamat Sempurna and Mark Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selamat Sempurna position performs unexpectedly, Mark Dynamics 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 Mark Dynamics will offset losses from the drop in Mark Dynamics' long position.| Selamat Sempurna vs. Surya Citra Media | Selamat Sempurna vs. Astra Otoparts Tbk | Selamat Sempurna vs. Ultra Jaya Milk | Selamat Sempurna vs. Ramayana Lestari Sentosa |
| Mark Dynamics vs. Samudera Indonesia Tbk | Mark Dynamics vs. Rukun Raharja Tbk | Mark Dynamics vs. PT Temas Tbk | Mark Dynamics vs. Weha Transportasi 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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