Correlation Between Transcoal Pacific and Satria Antaran
Can any of the company-specific risk be diversified away by investing in both Transcoal Pacific and Satria Antaran 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 Transcoal Pacific and Satria Antaran into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcoal Pacific Tbk and Satria Antaran Prima, you can compare the effects of market volatilities on Transcoal Pacific and Satria Antaran 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 Transcoal Pacific with a short position of Satria Antaran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcoal Pacific and Satria Antaran.
Diversification Opportunities for Transcoal Pacific and Satria Antaran
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Transcoal and Satria is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Transcoal Pacific Tbk and Satria Antaran Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satria Antaran Prima and Transcoal Pacific 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 Transcoal Pacific Tbk are associated (or correlated) with Satria Antaran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satria Antaran Prima has no effect on the direction of Transcoal Pacific i.e., Transcoal Pacific and Satria Antaran go up and down completely randomly.
Pair Corralation between Transcoal Pacific and Satria Antaran
Assuming the 90 days trading horizon Transcoal Pacific Tbk is expected to generate 0.44 times more return on investment than Satria Antaran. However, Transcoal Pacific Tbk is 2.29 times less risky than Satria Antaran. It trades about 0.11 of its potential returns per unit of risk. Satria Antaran Prima is currently generating about -0.37 per unit of risk. If you would invest 707,500 in Transcoal Pacific Tbk on August 31, 2024 and sell it today you would earn a total of 20,000 from holding Transcoal Pacific Tbk or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Transcoal Pacific Tbk vs. Satria Antaran Prima
Performance |
| Timeline |
| Transcoal Pacific Tbk |
| Satria Antaran Prima |
Transcoal Pacific and Satria Antaran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcoal Pacific and Satria Antaran
The main advantage of trading using opposite Transcoal Pacific and Satria Antaran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcoal Pacific position performs unexpectedly, Satria Antaran 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 Satria Antaran will offset losses from the drop in Satria Antaran's long position.| Transcoal Pacific vs. Matahari Department Store | Transcoal Pacific vs. Multi Medika Internasional | Transcoal Pacific vs. Visi Media Asia | Transcoal Pacific vs. Bayan Resources Tbk |
| Satria Antaran vs. PT Trimuda Nuansa | Satria Antaran vs. Guna Timur Raya | Satria Antaran vs. Pelayaran Nelly Dwi | Satria Antaran vs. Krida Jaringan Nusantara |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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