Correlation Between PT Sarana and Indosat Tbk
Can any of the company-specific risk be diversified away by investing in both PT Sarana and Indosat Tbk 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 Indosat Tbk 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 Indosat Tbk, you can compare the effects of market volatilities on PT Sarana and Indosat Tbk 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 Indosat Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sarana and Indosat Tbk.
Diversification Opportunities for PT Sarana and Indosat Tbk
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TOWR and Indosat is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PT Sarana Menara and Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosat Tbk 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 Indosat Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosat Tbk has no effect on the direction of PT Sarana i.e., PT Sarana and Indosat Tbk go up and down completely randomly.
Pair Corralation between PT Sarana and Indosat Tbk
Assuming the 90 days trading horizon PT Sarana Menara is expected to generate 0.24 times more return on investment than Indosat Tbk. However, PT Sarana Menara is 4.12 times less risky than Indosat Tbk. It trades about 0.05 of its potential returns per unit of risk. Indosat Tbk is currently generating about -0.08 per unit of risk. If you would invest 65,860 in PT Sarana Menara on September 12, 2024 and sell it today you would earn a total of 6,640 from holding PT Sarana Menara or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Sarana Menara vs. Indosat Tbk
Performance |
| Timeline |
| PT Sarana Menara |
| Indosat Tbk |
PT Sarana and Indosat Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Sarana and Indosat Tbk
The main advantage of trading using opposite PT Sarana and Indosat Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Sarana position performs unexpectedly, Indosat Tbk 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 Indosat Tbk will offset losses from the drop in Indosat Tbk's long position.| PT Sarana vs. Mnc Land Tbk | PT Sarana vs. MNC Vision Networks | PT Sarana vs. MD Pictures Tbk | PT Sarana vs. Link Net Tbk |
| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |