Correlation Between Indosterling Technomedia and Sinar Mas
Can any of the company-specific risk be diversified away by investing in both Indosterling Technomedia and Sinar Mas 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 Indosterling Technomedia and Sinar Mas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosterling Technomedia Tbk and Sinar Mas Agro, you can compare the effects of market volatilities on Indosterling Technomedia and Sinar Mas 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 Indosterling Technomedia with a short position of Sinar Mas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosterling Technomedia and Sinar Mas.
Diversification Opportunities for Indosterling Technomedia and Sinar Mas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indosterling and Sinar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indosterling Technomedia Tbk and Sinar Mas Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinar Mas Agro and Indosterling Technomedia 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 Indosterling Technomedia Tbk are associated (or correlated) with Sinar Mas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinar Mas Agro has no effect on the direction of Indosterling Technomedia i.e., Indosterling Technomedia and Sinar Mas go up and down completely randomly.
Pair Corralation between Indosterling Technomedia and Sinar Mas
Assuming the 90 days trading horizon Indosterling Technomedia Tbk is expected to under-perform the Sinar Mas. In addition to that, Indosterling Technomedia is 1.94 times more volatile than Sinar Mas Agro. It trades about -0.33 of its total potential returns per unit of risk. Sinar Mas Agro is currently generating about -0.01 per unit of volatility. If you would invest 447,635 in Sinar Mas Agro on September 2, 2024 and sell it today you would lose (54,635) from holding Sinar Mas Agro or give up 12.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Indosterling Technomedia Tbk vs. Sinar Mas Agro
Performance |
| Timeline |
| Indosterling Technomedia |
| Sinar Mas Agro |
Indosterling Technomedia and Sinar Mas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosterling Technomedia and Sinar Mas
The main advantage of trading using opposite Indosterling Technomedia and Sinar Mas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosterling Technomedia position performs unexpectedly, Sinar Mas 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 Sinar Mas will offset losses from the drop in Sinar Mas' long position.| Indosterling Technomedia vs. Multipolar Technology Tbk | Indosterling Technomedia vs. Digital Mediatama Maxima | Indosterling Technomedia vs. M Cash Integrasi | Indosterling Technomedia vs. NFC Indonesia PT |
| Sinar Mas vs. Bank BRISyariah Tbk | Sinar Mas vs. Mitra Pinasthika Mustika | Sinar Mas vs. Jakarta Int Hotels | Sinar Mas vs. Indosterling Technomedia 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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