Correlation Between Soechi Lines and PT Temas
Can any of the company-specific risk be diversified away by investing in both Soechi Lines and PT Temas 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 Soechi Lines and PT Temas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soechi Lines Tbk and PT Temas Tbk, you can compare the effects of market volatilities on Soechi Lines and PT Temas 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 Soechi Lines with a short position of PT Temas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soechi Lines and PT Temas.
Diversification Opportunities for Soechi Lines and PT Temas
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Soechi and TMAS is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Soechi Lines Tbk and PT Temas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Temas Tbk and Soechi Lines 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 Soechi Lines Tbk are associated (or correlated) with PT Temas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Temas Tbk has no effect on the direction of Soechi Lines i.e., Soechi Lines and PT Temas go up and down completely randomly.
Pair Corralation between Soechi Lines and PT Temas
Assuming the 90 days trading horizon Soechi Lines Tbk is expected to generate 0.8 times more return on investment than PT Temas. However, Soechi Lines Tbk is 1.25 times less risky than PT Temas. It trades about 0.16 of its potential returns per unit of risk. PT Temas Tbk is currently generating about 0.04 per unit of risk. If you would invest 15,800 in Soechi Lines Tbk on October 24, 2024 and sell it today you would earn a total of 500.00 from holding Soechi Lines Tbk or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soechi Lines Tbk vs. PT Temas Tbk
Performance |
| Timeline |
| Soechi Lines Tbk |
| PT Temas Tbk |
Soechi Lines and PT Temas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soechi Lines and PT Temas
The main advantage of trading using opposite Soechi Lines and PT Temas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soechi Lines position performs unexpectedly, PT Temas 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 PT Temas will offset losses from the drop in PT Temas' long position.| Soechi Lines vs. Samudera Indonesia Tbk | Soechi Lines vs. Buana Listya Tama | Soechi Lines vs. Mitrabahtera Segara Sejati | Soechi Lines vs. Bekasi Fajar Industrial |
| PT Temas vs. Samudera Indonesia Tbk | PT Temas vs. Weha Transportasi Indonesia | PT Temas vs. Rig Tenders Tbk | PT Temas vs. Total Bangun Persada |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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