Correlation Between PT Soho and Trisula International
Can any of the company-specific risk be diversified away by investing in both PT Soho and Trisula International 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 Trisula International 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 Trisula International Tbk, you can compare the effects of market volatilities on PT Soho and Trisula International 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 Trisula International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Soho and Trisula International.
Diversification Opportunities for PT Soho and Trisula International
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOHO and Trisula is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding PT Soho Global and Trisula International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisula International 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 Trisula International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisula International Tbk has no effect on the direction of PT Soho i.e., PT Soho and Trisula International go up and down completely randomly.
Pair Corralation between PT Soho and Trisula International
Assuming the 90 days trading horizon PT Soho Global is expected to generate 1.81 times more return on investment than Trisula International. However, PT Soho is 1.81 times more volatile than Trisula International Tbk. It trades about 0.16 of its potential returns per unit of risk. Trisula International Tbk is currently generating about 0.09 per unit of risk. If you would invest 62,500 in PT Soho Global on October 21, 2024 and sell it today you would earn a total of 5,000 from holding PT Soho Global or generate 8.0% 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. Trisula International Tbk
Performance |
| Timeline |
| PT Soho Global |
| Trisula International Tbk |
PT Soho and Trisula International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Soho and Trisula International
The main advantage of trading using opposite PT Soho and Trisula International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Soho position performs unexpectedly, Trisula International 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 Trisula International will offset losses from the drop in Trisula International's long position.| PT Soho vs. Kimia Farma Persero | PT Soho vs. Indofarma Tbk | PT Soho vs. Bank BRISyariah Tbk | PT Soho vs. Bank Rakyat Indonesia |
| Trisula International vs. Surya Permata Andalan | Trisula International vs. Aneka Gas Industri | Trisula International vs. Buana Listya Tama | Trisula International vs. Trisula Textile Industries |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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