Correlation Between Sriwahana and Guna Timur
Can any of the company-specific risk be diversified away by investing in both Sriwahana and Guna Timur 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 Sriwahana and Guna Timur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sriwahana and Guna Timur Raya, you can compare the effects of market volatilities on Sriwahana and Guna Timur 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 Sriwahana with a short position of Guna Timur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sriwahana and Guna Timur.
Diversification Opportunities for Sriwahana and Guna Timur
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sriwahana and Guna is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sriwahana and Guna Timur Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guna Timur Raya and Sriwahana 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 Sriwahana are associated (or correlated) with Guna Timur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guna Timur Raya has no effect on the direction of Sriwahana i.e., Sriwahana and Guna Timur go up and down completely randomly.
Pair Corralation between Sriwahana and Guna Timur
Assuming the 90 days trading horizon Sriwahana is expected to generate 2.07 times more return on investment than Guna Timur. However, Sriwahana is 2.07 times more volatile than Guna Timur Raya. It trades about -0.07 of its potential returns per unit of risk. Guna Timur Raya is currently generating about -0.29 per unit of risk. If you would invest 3,000 in Sriwahana on August 28, 2024 and sell it today you would lose (300.00) from holding Sriwahana or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sriwahana vs. Guna Timur Raya
Performance |
| Timeline |
| Sriwahana |
| Guna Timur Raya |
Sriwahana and Guna Timur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sriwahana and Guna Timur
The main advantage of trading using opposite Sriwahana and Guna Timur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sriwahana position performs unexpectedly, Guna Timur 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 Guna Timur will offset losses from the drop in Guna Timur's long position.| Sriwahana vs. Lotte Chemical Titan | Sriwahana vs. Agro Yasa Lestari | Sriwahana vs. Era Mandiri Cemerlang | Sriwahana vs. Jasnita Telekomindo Tbk |
| Guna Timur vs. Sinergi Inti Plastindo | Guna Timur vs. Hartadinata Abadi Tbk | Guna Timur vs. Weha Transportasi 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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