Correlation Between Surya Toto and Total Bangun
Can any of the company-specific risk be diversified away by investing in both Surya Toto and Total Bangun 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 Total Bangun 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 Total Bangun Persada, you can compare the effects of market volatilities on Surya Toto and Total Bangun 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 Total Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Toto and Total Bangun.
Diversification Opportunities for Surya Toto and Total Bangun
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Surya and Total is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Surya Toto Indonesia and Total Bangun Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Bangun Persada 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 Total Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Bangun Persada has no effect on the direction of Surya Toto i.e., Surya Toto and Total Bangun go up and down completely randomly.
Pair Corralation between Surya Toto and Total Bangun
Assuming the 90 days trading horizon Surya Toto is expected to generate 86.21 times less return on investment than Total Bangun. But when comparing it to its historical volatility, Surya Toto Indonesia is 2.74 times less risky than Total Bangun. It trades about 0.0 of its potential returns per unit of risk. Total Bangun Persada is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 21,406 in Total Bangun Persada on September 14, 2024 and sell it today you would earn a total of 50,094 from holding Total Bangun Persada or generate 234.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surya Toto Indonesia vs. Total Bangun Persada
Performance |
| Timeline |
| Surya Toto Indonesia |
| Total Bangun Persada |
Surya Toto and Total Bangun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surya Toto and Total Bangun
The main advantage of trading using opposite Surya Toto and Total Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Toto position performs unexpectedly, Total Bangun 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 Total Bangun will offset losses from the drop in Total Bangun'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 |
| Total Bangun vs. Kawasan Industri Jababeka | Total Bangun vs. Adhi Karya Persero | Total Bangun vs. Ciputra Development Tbk | Total Bangun vs. Solusi Bangun Indonesia |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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