Correlation Between PT Temas and PT Surya
Can any of the company-specific risk be diversified away by investing in both PT Temas and PT Surya 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 PT Surya 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 PT Surya Pertiwi, you can compare the effects of market volatilities on PT Temas and PT Surya 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 PT Surya. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Temas and PT Surya.
Diversification Opportunities for PT Temas and PT Surya
Pay attention - limited upside
The 3 months correlation between TMAS and SPTO is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding PT Temas Tbk and PT Surya Pertiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Surya Pertiwi 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 PT Surya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Surya Pertiwi has no effect on the direction of PT Temas i.e., PT Temas and PT Surya go up and down completely randomly.
Pair Corralation between PT Temas and PT Surya
Assuming the 90 days trading horizon PT Temas Tbk is expected to under-perform the PT Surya. But the stock apears to be less risky and, when comparing its historical volatility, PT Temas Tbk is 1.02 times less risky than PT Surya. The stock trades about -0.05 of its potential returns per unit of risk. The PT Surya Pertiwi is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 56,818 in PT Surya Pertiwi on August 28, 2024 and sell it today you would earn a total of 5,182 from holding PT Surya Pertiwi or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Temas Tbk vs. PT Surya Pertiwi
Performance |
| Timeline |
| PT Temas Tbk |
| PT Surya Pertiwi |
PT Temas and PT Surya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Temas and PT Surya
The main advantage of trading using opposite PT Temas and PT Surya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Temas position performs unexpectedly, PT Surya 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 PT Surya will offset losses from the drop in PT Surya's long position.The idea behind PT Temas Tbk and PT Surya Pertiwi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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