Correlation Between Surya Toto and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Surya Toto and Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on Surya Toto and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Toto and Trias Sentosa.
Diversification Opportunities for Surya Toto and Trias Sentosa
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Surya and Trias is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Surya Toto Indonesia and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa Tbk 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Surya Toto i.e., Surya Toto and Trias Sentosa go up and down completely randomly.
Pair Corralation between Surya Toto and Trias Sentosa
Assuming the 90 days trading horizon Surya Toto Indonesia is expected to generate 0.36 times more return on investment than Trias Sentosa. However, Surya Toto Indonesia is 2.79 times less risky than Trias Sentosa. It trades about 0.04 of its potential returns per unit of risk. Trias Sentosa Tbk is currently generating about -0.02 per unit of risk. If you would invest 19,762 in Surya Toto Indonesia on August 29, 2024 and sell it today you would earn a total of 2,838 from holding Surya Toto Indonesia or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surya Toto Indonesia vs. Trias Sentosa Tbk
Performance |
| Timeline |
| Surya Toto Indonesia |
| Trias Sentosa Tbk |
Surya Toto and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surya Toto and Trias Sentosa
The main advantage of trading using opposite Surya Toto and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Toto position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa's long position.The idea behind Surya Toto Indonesia and Trias Sentosa Tbk 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.| Trias Sentosa vs. Kedaung Indah Can | Trias Sentosa vs. Langgeng Makmur Industri | Trias Sentosa vs. Kabelindo Murni Tbk | Trias Sentosa vs. Mustika Ratu 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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