Correlation Between PT Temas and Samudera Indonesia
Can any of the company-specific risk be diversified away by investing in both PT Temas and Samudera Indonesia 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 PT Temas and Samudera Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Temas Tbk and Samudera Indonesia Tbk, you can compare the effects of market volatilities on PT Temas and Samudera Indonesia 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 PT Temas with a short position of Samudera Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Temas and Samudera Indonesia.
Diversification Opportunities for PT Temas and Samudera Indonesia
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TMAS and Samudera is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding PT Temas Tbk and Samudera Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samudera Indonesia Tbk and PT Temas 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 PT Temas Tbk are associated (or correlated) with Samudera Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samudera Indonesia Tbk has no effect on the direction of PT Temas i.e., PT Temas and Samudera Indonesia go up and down completely randomly.
Pair Corralation between PT Temas and Samudera Indonesia
Assuming the 90 days trading horizon PT Temas Tbk is expected to generate 1.0 times more return on investment than Samudera Indonesia. However, PT Temas is 1.0 times more volatile than Samudera Indonesia Tbk. It trades about -0.06 of its potential returns per unit of risk. Samudera Indonesia Tbk is currently generating about -0.2 per unit of risk. If you would invest 14,900 in PT Temas Tbk on November 2, 2024 and sell it today you would lose (1,400) from holding PT Temas Tbk or give up 9.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Temas Tbk vs. Samudera Indonesia Tbk
Performance |
| Timeline |
| PT Temas Tbk |
| Samudera Indonesia Tbk |
PT Temas and Samudera Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Temas and Samudera Indonesia
The main advantage of trading using opposite PT Temas and Samudera Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Temas position performs unexpectedly, Samudera Indonesia 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 Samudera Indonesia will offset losses from the drop in Samudera Indonesia's long position.| PT Temas vs. Kabelindo Murni Tbk | PT Temas vs. Sumi Indo Kabel | PT Temas vs. Kmi Wire And | PT Temas vs. Indospring Tbk |
| Samudera Indonesia vs. PT Temas Tbk | Samudera Indonesia vs. Petrosea Tbk | Samudera Indonesia vs. Rig Tenders Tbk | Samudera Indonesia vs. Rukun Raharja 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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