Correlation Between Tembaga Mulia and Suparma Tbk
Can any of the company-specific risk be diversified away by investing in both Tembaga Mulia and Suparma Tbk 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 Tembaga Mulia and Suparma Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tembaga Mulia Semanan and Suparma Tbk, you can compare the effects of market volatilities on Tembaga Mulia and Suparma Tbk 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 Tembaga Mulia with a short position of Suparma Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tembaga Mulia and Suparma Tbk.
Diversification Opportunities for Tembaga Mulia and Suparma Tbk
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tembaga and Suparma is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tembaga Mulia Semanan and Suparma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suparma Tbk and Tembaga Mulia 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 Tembaga Mulia Semanan are associated (or correlated) with Suparma Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suparma Tbk has no effect on the direction of Tembaga Mulia i.e., Tembaga Mulia and Suparma Tbk go up and down completely randomly.
Pair Corralation between Tembaga Mulia and Suparma Tbk
Assuming the 90 days trading horizon Tembaga Mulia Semanan is expected to generate 2.07 times more return on investment than Suparma Tbk. However, Tembaga Mulia is 2.07 times more volatile than Suparma Tbk. It trades about 0.01 of its potential returns per unit of risk. Suparma Tbk is currently generating about -0.03 per unit of risk. If you would invest 95,362 in Tembaga Mulia Semanan on August 25, 2024 and sell it today you would lose (1,862) from holding Tembaga Mulia Semanan or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.61% |
| Values | Daily Returns |
Tembaga Mulia Semanan vs. Suparma Tbk
Performance |
| Timeline |
| Tembaga Mulia Semanan |
| Suparma Tbk |
Tembaga Mulia and Suparma Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tembaga Mulia and Suparma Tbk
The main advantage of trading using opposite Tembaga Mulia and Suparma Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tembaga Mulia position performs unexpectedly, Suparma Tbk 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 Suparma Tbk will offset losses from the drop in Suparma Tbk's long position.| Tembaga Mulia vs. Samudera Indonesia Tbk | Tembaga Mulia vs. Rukun Raharja Tbk | Tembaga Mulia vs. PT Temas Tbk | Tembaga Mulia vs. Weha Transportasi Indonesia |
| Suparma Tbk vs. Kedaung Indah Can | Suparma Tbk vs. Langgeng Makmur Industri | Suparma Tbk vs. Kabelindo Murni Tbk | Suparma Tbk vs. Mustika Ratu Tbk |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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