Correlation Between Sunson Textile and Pembangunan Jaya
Can any of the company-specific risk be diversified away by investing in both Sunson Textile and Pembangunan Jaya 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 Sunson Textile and Pembangunan Jaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunson Textile Manufacturer and Pembangunan Jaya Ancol, you can compare the effects of market volatilities on Sunson Textile and Pembangunan Jaya 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 Sunson Textile with a short position of Pembangunan Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunson Textile and Pembangunan Jaya.
Diversification Opportunities for Sunson Textile and Pembangunan Jaya
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunson and Pembangunan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sunson Textile Manufacturer and Pembangunan Jaya Ancol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembangunan Jaya Ancol and Sunson Textile 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 Sunson Textile Manufacturer are associated (or correlated) with Pembangunan Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembangunan Jaya Ancol has no effect on the direction of Sunson Textile i.e., Sunson Textile and Pembangunan Jaya go up and down completely randomly.
Pair Corralation between Sunson Textile and Pembangunan Jaya
Assuming the 90 days trading horizon Sunson Textile Manufacturer is expected to under-perform the Pembangunan Jaya. In addition to that, Sunson Textile is 1.2 times more volatile than Pembangunan Jaya Ancol. It trades about -0.11 of its total potential returns per unit of risk. Pembangunan Jaya Ancol is currently generating about -0.02 per unit of volatility. If you would invest 76,367 in Pembangunan Jaya Ancol on September 2, 2024 and sell it today you would lose (17,367) from holding Pembangunan Jaya Ancol or give up 22.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunson Textile Manufacturer vs. Pembangunan Jaya Ancol
Performance |
| Timeline |
| Sunson Textile Manuf |
| Pembangunan Jaya Ancol |
Sunson Textile and Pembangunan Jaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunson Textile and Pembangunan Jaya
The main advantage of trading using opposite Sunson Textile and Pembangunan Jaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunson Textile position performs unexpectedly, Pembangunan Jaya 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 Pembangunan Jaya will offset losses from the drop in Pembangunan Jaya's long position.| Sunson Textile vs. Tifico Fiber Indonesia | Sunson Textile vs. Ricky Putra Globalindo | Sunson Textile vs. Supreme Cable Manufacturing | Sunson Textile vs. Voksel Electric 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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