Correlation Between PT Sarana and Autopedia Sukses
Can any of the company-specific risk be diversified away by investing in both PT Sarana and Autopedia Sukses 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 Sarana and Autopedia Sukses into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Sarana Menara and Autopedia Sukses Lestari, you can compare the effects of market volatilities on PT Sarana and Autopedia Sukses 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 Sarana with a short position of Autopedia Sukses. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sarana and Autopedia Sukses.
Diversification Opportunities for PT Sarana and Autopedia Sukses
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TOWR and Autopedia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding PT Sarana Menara and Autopedia Sukses Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autopedia Sukses Lestari and PT Sarana 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 Sarana Menara are associated (or correlated) with Autopedia Sukses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autopedia Sukses Lestari has no effect on the direction of PT Sarana i.e., PT Sarana and Autopedia Sukses go up and down completely randomly.
Pair Corralation between PT Sarana and Autopedia Sukses
Assuming the 90 days trading horizon PT Sarana Menara is expected to generate 0.86 times more return on investment than Autopedia Sukses. However, PT Sarana Menara is 1.17 times less risky than Autopedia Sukses. It trades about -0.28 of its potential returns per unit of risk. Autopedia Sukses Lestari is currently generating about -0.52 per unit of risk. If you would invest 77,500 in PT Sarana Menara on August 27, 2024 and sell it today you would lose (5,500) from holding PT Sarana Menara or give up 7.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Sarana Menara vs. Autopedia Sukses Lestari
Performance |
| Timeline |
| PT Sarana Menara |
| Autopedia Sukses Lestari |
PT Sarana and Autopedia Sukses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Sarana and Autopedia Sukses
The main advantage of trading using opposite PT Sarana and Autopedia Sukses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Sarana position performs unexpectedly, Autopedia Sukses 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 Autopedia Sukses will offset losses from the drop in Autopedia Sukses' long position.The idea behind PT Sarana Menara and Autopedia Sukses Lestari 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.| Autopedia Sukses vs. Adaro Minerals Indonesia | Autopedia Sukses vs. Dharma Polimetal Tbk | Autopedia Sukses vs. Wir Asia Tbk | Autopedia Sukses vs. Adi Sarana Armada |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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