Correlation Between Surya Toto and Supreme Cable
Can any of the company-specific risk be diversified away by investing in both Surya Toto and Supreme Cable 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 Surya Toto and Supreme Cable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surya Toto Indonesia and Supreme Cable Manufacturing, you can compare the effects of market volatilities on Surya Toto and Supreme Cable 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 Surya Toto with a short position of Supreme Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Toto and Supreme Cable.
Diversification Opportunities for Surya Toto and Supreme Cable
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Surya and Supreme is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Surya Toto Indonesia and Supreme Cable Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supreme Cable Manufa and Surya Toto 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 Surya Toto Indonesia are associated (or correlated) with Supreme Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supreme Cable Manufa has no effect on the direction of Surya Toto i.e., Surya Toto and Supreme Cable go up and down completely randomly.
Pair Corralation between Surya Toto and Supreme Cable
Assuming the 90 days trading horizon Surya Toto Indonesia is expected to generate 0.82 times more return on investment than Supreme Cable. However, Surya Toto Indonesia is 1.22 times less risky than Supreme Cable. It trades about 0.12 of its potential returns per unit of risk. Supreme Cable Manufacturing is currently generating about 0.07 per unit of risk. If you would invest 19,173 in Surya Toto Indonesia on September 13, 2024 and sell it today you would earn a total of 3,227 from holding Surya Toto Indonesia or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surya Toto Indonesia vs. Supreme Cable Manufacturing
Performance |
| Timeline |
| Surya Toto Indonesia |
| Supreme Cable Manufa |
Surya Toto and Supreme Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surya Toto and Supreme Cable
The main advantage of trading using opposite Surya Toto and Supreme Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Toto position performs unexpectedly, Supreme Cable 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 Supreme Cable will offset losses from the drop in Supreme Cable's long position.| Surya Toto vs. Unggul Indah Cahaya | Surya Toto vs. Tembaga Mulia Semanan | Surya Toto vs. PT Mulia Industrindo | Surya Toto vs. Trias Sentosa Tbk |
| Supreme Cable vs. Voksel Electric Tbk | Supreme Cable vs. Kmi Wire And | Supreme Cable vs. Kabelindo Murni Tbk | Supreme Cable vs. Selamat Sempurna 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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