Correlation Between Saratoga Investama and Puradelta Lestari
Can any of the company-specific risk be diversified away by investing in both Saratoga Investama and Puradelta Lestari 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 Saratoga Investama and Puradelta Lestari into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saratoga Investama Sedaya and Puradelta Lestari PT, you can compare the effects of market volatilities on Saratoga Investama and Puradelta Lestari 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 Saratoga Investama with a short position of Puradelta Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saratoga Investama and Puradelta Lestari.
Diversification Opportunities for Saratoga Investama and Puradelta Lestari
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Saratoga and Puradelta is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Saratoga Investama Sedaya and Puradelta Lestari PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puradelta Lestari and Saratoga Investama 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 Saratoga Investama Sedaya are associated (or correlated) with Puradelta Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puradelta Lestari has no effect on the direction of Saratoga Investama i.e., Saratoga Investama and Puradelta Lestari go up and down completely randomly.
Pair Corralation between Saratoga Investama and Puradelta Lestari
Assuming the 90 days trading horizon Saratoga Investama Sedaya is expected to generate 6.02 times more return on investment than Puradelta Lestari. However, Saratoga Investama is 6.02 times more volatile than Puradelta Lestari PT. It trades about 0.01 of its potential returns per unit of risk. Puradelta Lestari PT is currently generating about -0.12 per unit of risk. If you would invest 224,000 in Saratoga Investama Sedaya on August 29, 2024 and sell it today you would lose (1,000.00) from holding Saratoga Investama Sedaya or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saratoga Investama Sedaya vs. Puradelta Lestari PT
Performance |
| Timeline |
| Saratoga Investama Sedaya |
| Puradelta Lestari |
Saratoga Investama and Puradelta Lestari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saratoga Investama and Puradelta Lestari
The main advantage of trading using opposite Saratoga Investama and Puradelta Lestari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saratoga Investama position performs unexpectedly, Puradelta Lestari 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 Puradelta Lestari will offset losses from the drop in Puradelta Lestari's long position.| Saratoga Investama vs. Elang Mahkota Teknologi | Saratoga Investama vs. Mitra Pinasthika Mustika | Saratoga Investama vs. Tower Bersama Infrastructure | Saratoga Investama vs. Merdeka Copper Gold |
| Puradelta Lestari vs. Bakrie Brothers Tbk | Puradelta Lestari vs. Bakrie Sumatera Plantations | Puradelta Lestari vs. Energi Mega Persada | Puradelta Lestari vs. Darma Henwa 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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