Correlation Between PT Soho and Star Pacific
Can any of the company-specific risk be diversified away by investing in both PT Soho and Star Pacific 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 PT Soho and Star Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Soho Global and Star Pacific Tbk, you can compare the effects of market volatilities on PT Soho and Star Pacific 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 PT Soho with a short position of Star Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Soho and Star Pacific.
Diversification Opportunities for PT Soho and Star Pacific
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOHO and Star is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PT Soho Global and Star Pacific Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Pacific Tbk and PT Soho 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 PT Soho Global are associated (or correlated) with Star Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Pacific Tbk has no effect on the direction of PT Soho i.e., PT Soho and Star Pacific go up and down completely randomly.
Pair Corralation between PT Soho and Star Pacific
Assuming the 90 days trading horizon PT Soho Global is expected to generate 0.37 times more return on investment than Star Pacific. However, PT Soho Global is 2.73 times less risky than Star Pacific. It trades about 0.0 of its potential returns per unit of risk. Star Pacific Tbk is currently generating about -0.19 per unit of risk. If you would invest 69,000 in PT Soho Global on August 29, 2024 and sell it today you would earn a total of 0.00 from holding PT Soho Global or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Soho Global vs. Star Pacific Tbk
Performance |
| Timeline |
| PT Soho Global |
| Star Pacific Tbk |
PT Soho and Star Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Soho and Star Pacific
The main advantage of trading using opposite PT Soho and Star Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Soho position performs unexpectedly, Star Pacific 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 Star Pacific will offset losses from the drop in Star Pacific's long position.| PT Soho vs. Phapros Tbk PT | PT Soho vs. Prodia Widyahusada Tbk | PT Soho vs. Sarana Meditama Metropolitan | PT Soho vs. Metro Healthcare Indonesia |
| Star Pacific vs. Lenox Pasifik Investama | Star Pacific vs. Multipolar Tbk | Star Pacific vs. Lautan Luas Tbk | Star Pacific vs. Metrodata Electronics 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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