Correlation Between Sumber Tani and Wir Asia
Can any of the company-specific risk be diversified away by investing in both Sumber Tani and Wir Asia 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 Wir Asia 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 Wir Asia Tbk, you can compare the effects of market volatilities on Sumber Tani and Wir Asia 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 Wir Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Tani and Wir Asia.
Diversification Opportunities for Sumber Tani and Wir Asia
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumber and Wir is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Tani Agung and Wir Asia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wir Asia Tbk 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 Wir Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wir Asia Tbk has no effect on the direction of Sumber Tani i.e., Sumber Tani and Wir Asia go up and down completely randomly.
Pair Corralation between Sumber Tani and Wir Asia
Assuming the 90 days trading horizon Sumber Tani Agung is expected to generate 0.42 times more return on investment than Wir Asia. However, Sumber Tani Agung is 2.39 times less risky than Wir Asia. It trades about -0.27 of its potential returns per unit of risk. Wir Asia Tbk is currently generating about -0.42 per unit of risk. If you would invest 91,000 in Sumber Tani Agung on August 31, 2024 and sell it today you would lose (6,500) from holding Sumber Tani Agung or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sumber Tani Agung vs. Wir Asia Tbk
Performance |
| Timeline |
| Sumber Tani Agung |
| Wir Asia Tbk |
Sumber Tani and Wir Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Tani and Wir Asia
The main advantage of trading using opposite Sumber Tani and Wir Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Tani position performs unexpectedly, Wir Asia 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 Wir Asia will offset losses from the drop in Wir Asia's long position.| Sumber Tani vs. PT Dewi Shri | Sumber Tani vs. Habco Trans Maritima | Sumber Tani vs. PT Cilacap Samudera | Sumber Tani vs. PT Sari Kreasi |
| Wir Asia vs. Multipolar Technology Tbk | Wir Asia vs. Digital Mediatama Maxima | Wir Asia vs. NFC Indonesia PT | Wir Asia vs. Kioson Komersial 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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