Correlation Between Sawit Sumbermas and Cisadane Sawit
Can any of the company-specific risk be diversified away by investing in both Sawit Sumbermas and Cisadane Sawit 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 Sawit Sumbermas and Cisadane Sawit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sawit Sumbermas Sarana and Cisadane Sawit Raya, you can compare the effects of market volatilities on Sawit Sumbermas and Cisadane Sawit 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 Sawit Sumbermas with a short position of Cisadane Sawit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sawit Sumbermas and Cisadane Sawit.
Diversification Opportunities for Sawit Sumbermas and Cisadane Sawit
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sawit and Cisadane is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sawit Sumbermas Sarana and Cisadane Sawit Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisadane Sawit Raya and Sawit Sumbermas 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 Sawit Sumbermas Sarana are associated (or correlated) with Cisadane Sawit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisadane Sawit Raya has no effect on the direction of Sawit Sumbermas i.e., Sawit Sumbermas and Cisadane Sawit go up and down completely randomly.
Pair Corralation between Sawit Sumbermas and Cisadane Sawit
Assuming the 90 days trading horizon Sawit Sumbermas Sarana is expected to under-perform the Cisadane Sawit. But the stock apears to be less risky and, when comparing its historical volatility, Sawit Sumbermas Sarana is 1.05 times less risky than Cisadane Sawit. The stock trades about -0.38 of its potential returns per unit of risk. The Cisadane Sawit Raya is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 68,000 in Cisadane Sawit Raya on September 1, 2024 and sell it today you would earn a total of 2,000 from holding Cisadane Sawit Raya or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sawit Sumbermas Sarana vs. Cisadane Sawit Raya
Performance |
| Timeline |
| Sawit Sumbermas Sarana |
| Cisadane Sawit Raya |
Sawit Sumbermas and Cisadane Sawit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sawit Sumbermas and Cisadane Sawit
The main advantage of trading using opposite Sawit Sumbermas and Cisadane Sawit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sawit Sumbermas position performs unexpectedly, Cisadane Sawit 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 Cisadane Sawit will offset losses from the drop in Cisadane Sawit's long position.| Sawit Sumbermas vs. Surya Citra Media | Sawit Sumbermas vs. Matahari Department Store | Sawit Sumbermas vs. Salim Ivomas Pratama | Sawit Sumbermas vs. Akr Corporindo Tbk |
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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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