Correlation Between Sumber Tani and Triputra Agro
Can any of the company-specific risk be diversified away by investing in both Sumber Tani and Triputra Agro 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 Sumber Tani and Triputra Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Tani Agung and Triputra Agro Persada, you can compare the effects of market volatilities on Sumber Tani and Triputra Agro 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 Sumber Tani with a short position of Triputra Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Tani and Triputra Agro.
Diversification Opportunities for Sumber Tani and Triputra Agro
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumber and Triputra is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Tani Agung and Triputra Agro Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triputra Agro Persada and Sumber Tani 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 Sumber Tani Agung are associated (or correlated) with Triputra Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triputra Agro Persada has no effect on the direction of Sumber Tani i.e., Sumber Tani and Triputra Agro go up and down completely randomly.
Pair Corralation between Sumber Tani and Triputra Agro
Assuming the 90 days trading horizon Sumber Tani is expected to generate 3.66 times less return on investment than Triputra Agro. But when comparing it to its historical volatility, Sumber Tani Agung is 1.44 times less risky than Triputra Agro. It trades about 0.06 of its potential returns per unit of risk. Triputra Agro Persada is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 45,733 in Triputra Agro Persada on September 18, 2024 and sell it today you would earn a total of 30,767 from holding Triputra Agro Persada or generate 67.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Sumber Tani Agung vs. Triputra Agro Persada
Performance |
| Timeline |
| Sumber Tani Agung |
| Triputra Agro Persada |
Sumber Tani and Triputra Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Tani and Triputra Agro
The main advantage of trading using opposite Sumber Tani and Triputra Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Tani position performs unexpectedly, Triputra Agro 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 Triputra Agro will offset losses from the drop in Triputra Agro's long position.| Sumber Tani vs. Triputra Agro Persada | Sumber Tani vs. Dayamitra Telekomunikasi PT | Sumber Tani vs. RMK Energy PT | Sumber Tani vs. Dharma Satya Nusantara |
| Triputra Agro vs. Mahkota Group Tbk | Triputra Agro vs. Palma Serasih PT | Triputra Agro vs. Cisadane Sawit Raya | Triputra Agro vs. Diamond Food Indonesia |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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