Correlation Between Sawit Sumbermas and Sejahteraraya Anugrahjaya
Can any of the company-specific risk be diversified away by investing in both Sawit Sumbermas and Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya Tbk, you can compare the effects of market volatilities on Sawit Sumbermas and Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sawit Sumbermas and Sejahteraraya Anugrahjaya.
Diversification Opportunities for Sawit Sumbermas and Sejahteraraya Anugrahjaya
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sawit and Sejahteraraya is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sawit Sumbermas Sarana and Sejahteraraya Anugrahjaya Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejahteraraya Anugrahjaya has no effect on the direction of Sawit Sumbermas i.e., Sawit Sumbermas and Sejahteraraya Anugrahjaya go up and down completely randomly.
Pair Corralation between Sawit Sumbermas and Sejahteraraya Anugrahjaya
Assuming the 90 days trading horizon Sawit Sumbermas Sarana is expected to generate 0.74 times more return on investment than Sejahteraraya Anugrahjaya. However, Sawit Sumbermas Sarana is 1.34 times less risky than Sejahteraraya Anugrahjaya. It trades about -0.35 of its potential returns per unit of risk. Sejahteraraya Anugrahjaya Tbk is currently generating about -0.38 per unit of risk. If you would invest 116,500 in Sawit Sumbermas Sarana on September 3, 2024 and sell it today you would lose (13,500) from holding Sawit Sumbermas Sarana or give up 11.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sawit Sumbermas Sarana vs. Sejahteraraya Anugrahjaya Tbk
Performance |
| Timeline |
| Sawit Sumbermas Sarana |
| Sejahteraraya Anugrahjaya |
Sawit Sumbermas and Sejahteraraya Anugrahjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sawit Sumbermas and Sejahteraraya Anugrahjaya
The main advantage of trading using opposite Sawit Sumbermas and Sejahteraraya Anugrahjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sawit Sumbermas position performs unexpectedly, Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya will offset losses from the drop in Sejahteraraya Anugrahjaya's long position.| Sawit Sumbermas vs. Astra International Tbk | Sawit Sumbermas vs. Unilever Indonesia Tbk | Sawit Sumbermas vs. Telkom Indonesia Tbk | Sawit Sumbermas vs. Bank Mandiri Persero |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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