Correlation Between PT Sarana and Leyand International
Can any of the company-specific risk be diversified away by investing in both PT Sarana and Leyand International 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 Leyand International 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 Leyand International Tbk, you can compare the effects of market volatilities on PT Sarana and Leyand International 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 Leyand International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sarana and Leyand International.
Diversification Opportunities for PT Sarana and Leyand International
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TOWR and Leyand is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding PT Sarana Menara and Leyand International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyand International 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 Leyand International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyand International Tbk has no effect on the direction of PT Sarana i.e., PT Sarana and Leyand International go up and down completely randomly.
Pair Corralation between PT Sarana and Leyand International
Assuming the 90 days trading horizon PT Sarana is expected to generate 1.17 times less return on investment than Leyand International. But when comparing it to its historical volatility, PT Sarana Menara is 1.72 times less risky than Leyand International. It trades about 0.18 of its potential returns per unit of risk. Leyand International Tbk is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,800 in Leyand International Tbk on October 25, 2024 and sell it today you would earn a total of 200.00 from holding Leyand International Tbk or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Sarana Menara vs. Leyand International Tbk
Performance |
| Timeline |
| PT Sarana Menara |
| Leyand International Tbk |
PT Sarana and Leyand International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Sarana and Leyand International
The main advantage of trading using opposite PT Sarana and Leyand International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Sarana position performs unexpectedly, Leyand International 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 Leyand International will offset losses from the drop in Leyand International's long position.| PT Sarana vs. Tower Bersama Infrastructure | PT Sarana vs. Merdeka Copper Gold | PT Sarana vs. XL Axiata Tbk | PT Sarana vs. Japfa Comfeed Indonesia |
| Leyand International vs. Ciptadana Asset Management | Leyand International vs. Hero Supermarket Tbk | Leyand International vs. PT UBC Medical | Leyand International vs. Tera Data Indonusa |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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