Correlation Between Selamat Sempurna and Supreme Cable
Can any of the company-specific risk be diversified away by investing in both Selamat Sempurna and Supreme Cable 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 Supreme Cable 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 Supreme Cable Manufacturing, you can compare the effects of market volatilities on Selamat Sempurna and Supreme Cable 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 Supreme Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selamat Sempurna and Supreme Cable.
Diversification Opportunities for Selamat Sempurna and Supreme Cable
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Selamat and Supreme is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Selamat Sempurna Tbk and Supreme Cable Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supreme Cable Manufa 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 Supreme Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supreme Cable Manufa has no effect on the direction of Selamat Sempurna i.e., Selamat Sempurna and Supreme Cable go up and down completely randomly.
Pair Corralation between Selamat Sempurna and Supreme Cable
Assuming the 90 days trading horizon Selamat Sempurna Tbk is expected to under-perform the Supreme Cable. In addition to that, Selamat Sempurna is 1.21 times more volatile than Supreme Cable Manufacturing. It trades about 0.0 of its total potential returns per unit of risk. Supreme Cable Manufacturing is currently generating about 0.08 per unit of volatility. If you would invest 217,000 in Supreme Cable Manufacturing on August 28, 2024 and sell it today you would earn a total of 4,000 from holding Supreme Cable Manufacturing or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Selamat Sempurna Tbk vs. Supreme Cable Manufacturing
Performance |
| Timeline |
| Selamat Sempurna Tbk |
| Supreme Cable Manufa |
Selamat Sempurna and Supreme Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selamat Sempurna and Supreme Cable
The main advantage of trading using opposite Selamat Sempurna and Supreme Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selamat Sempurna position performs unexpectedly, Supreme Cable 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 Supreme Cable will offset losses from the drop in Supreme Cable's 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 |
| Supreme Cable vs. Voksel Electric Tbk | Supreme Cable vs. Kmi Wire And | Supreme Cable vs. Kabelindo Murni Tbk | Supreme Cable vs. Selamat Sempurna 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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