Correlation Between Sona Topas and Pioneerindo Gourmet
Can any of the company-specific risk be diversified away by investing in both Sona Topas and Pioneerindo Gourmet 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 Sona Topas and Pioneerindo Gourmet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sona Topas Tourism and Pioneerindo Gourmet International, you can compare the effects of market volatilities on Sona Topas and Pioneerindo Gourmet 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 Sona Topas with a short position of Pioneerindo Gourmet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sona Topas and Pioneerindo Gourmet.
Diversification Opportunities for Sona Topas and Pioneerindo Gourmet
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sona and Pioneerindo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sona Topas Tourism and Pioneerindo Gourmet Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneerindo Gourmet and Sona Topas 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 Sona Topas Tourism are associated (or correlated) with Pioneerindo Gourmet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneerindo Gourmet has no effect on the direction of Sona Topas i.e., Sona Topas and Pioneerindo Gourmet go up and down completely randomly.
Pair Corralation between Sona Topas and Pioneerindo Gourmet
Assuming the 90 days trading horizon Sona Topas Tourism is expected to generate 1.99 times more return on investment than Pioneerindo Gourmet. However, Sona Topas is 1.99 times more volatile than Pioneerindo Gourmet International. It trades about 0.15 of its potential returns per unit of risk. Pioneerindo Gourmet International is currently generating about 0.0 per unit of risk. If you would invest 315,000 in Sona Topas Tourism on November 27, 2024 and sell it today you would earn a total of 75,000 from holding Sona Topas Tourism or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sona Topas Tourism vs. Pioneerindo Gourmet Internatio
Performance |
| Timeline |
| Sona Topas Tourism |
| Pioneerindo Gourmet |
Sona Topas and Pioneerindo Gourmet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sona Topas and Pioneerindo Gourmet
The main advantage of trading using opposite Sona Topas and Pioneerindo Gourmet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sona Topas position performs unexpectedly, Pioneerindo Gourmet 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 Pioneerindo Gourmet will offset losses from the drop in Pioneerindo Gourmet's long position.| Sona Topas vs. Optima Prima Metal | Sona Topas vs. Fast Food Indonesia | Sona Topas vs. Inocycle Technology Tbk | Sona Topas vs. Hero Supermarket Tbk |
| Pioneerindo Gourmet vs. Pudjiadi Sons Tbk | Pioneerindo Gourmet vs. Hotel Sahid Jaya | Pioneerindo Gourmet vs. Sona Topas Tourism | Pioneerindo Gourmet vs. Panorama Sentrawisata 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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