Correlation Between Tower Bersama and Adi Sarana
Can any of the company-specific risk be diversified away by investing in both Tower Bersama and Adi Sarana 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 Tower Bersama and Adi Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Bersama Infrastructure and Adi Sarana Armada, you can compare the effects of market volatilities on Tower Bersama and Adi Sarana 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 Tower Bersama with a short position of Adi Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Bersama and Adi Sarana.
Diversification Opportunities for Tower Bersama and Adi Sarana
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tower and Adi is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tower Bersama Infrastructure and Adi Sarana Armada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adi Sarana Armada and Tower Bersama 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 Tower Bersama Infrastructure are associated (or correlated) with Adi Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adi Sarana Armada has no effect on the direction of Tower Bersama i.e., Tower Bersama and Adi Sarana go up and down completely randomly.
Pair Corralation between Tower Bersama and Adi Sarana
Assuming the 90 days trading horizon Tower Bersama Infrastructure is expected to under-perform the Adi Sarana. But the stock apears to be less risky and, when comparing its historical volatility, Tower Bersama Infrastructure is 1.54 times less risky than Adi Sarana. The stock trades about -0.01 of its potential returns per unit of risk. The Adi Sarana Armada is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 74,604 in Adi Sarana Armada on August 25, 2024 and sell it today you would lose (2,604) from holding Adi Sarana Armada or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower Bersama Infrastructure vs. Adi Sarana Armada
Performance |
| Timeline |
| Tower Bersama Infras |
| Adi Sarana Armada |
Tower Bersama and Adi Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Bersama and Adi Sarana
The main advantage of trading using opposite Tower Bersama and Adi Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Bersama position performs unexpectedly, Adi Sarana 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 Adi Sarana will offset losses from the drop in Adi Sarana's long position.| Tower Bersama vs. PT Sarana Menara | Tower Bersama vs. XL Axiata Tbk | Tower Bersama vs. Merdeka Copper Gold | Tower Bersama vs. Surya Citra Media |
| Adi Sarana vs. Surya Esa Perkasa | Adi Sarana vs. Tower Bersama Infrastructure | Adi Sarana vs. Erajaya Swasembada Tbk | Adi Sarana vs. Bekasi Fajar Industrial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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