Correlation Between Unilever Indonesia and Sanurhasta Mitra
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Sanurhasta Mitra 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 Unilever Indonesia and Sanurhasta Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Indonesia Tbk and Sanurhasta Mitra PT, you can compare the effects of market volatilities on Unilever Indonesia and Sanurhasta Mitra 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 Unilever Indonesia with a short position of Sanurhasta Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Sanurhasta Mitra.
Diversification Opportunities for Unilever Indonesia and Sanurhasta Mitra
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unilever and Sanurhasta is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Sanurhasta Mitra PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanurhasta Mitra and Unilever Indonesia 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 Unilever Indonesia Tbk are associated (or correlated) with Sanurhasta Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanurhasta Mitra has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Sanurhasta Mitra go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Sanurhasta Mitra
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to under-perform the Sanurhasta Mitra. But the stock apears to be less risky and, when comparing its historical volatility, Unilever Indonesia Tbk is 1.86 times less risky than Sanurhasta Mitra. The stock trades about -0.09 of its potential returns per unit of risk. The Sanurhasta Mitra PT is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,100 in Sanurhasta Mitra PT on September 1, 2024 and sell it today you would lose (1,700) from holding Sanurhasta Mitra PT or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.61% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Sanurhasta Mitra PT
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Sanurhasta Mitra |
Unilever Indonesia and Sanurhasta Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Sanurhasta Mitra
The main advantage of trading using opposite Unilever Indonesia and Sanurhasta Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Sanurhasta Mitra 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 Sanurhasta Mitra will offset losses from the drop in Sanurhasta Mitra's long position.| Unilever Indonesia vs. PT Indofood Sukses | Unilever Indonesia vs. Astra International Tbk | Unilever Indonesia vs. Telkom Indonesia Tbk | Unilever Indonesia vs. Bank Central Asia |
| Sanurhasta Mitra vs. Lippo Cikarang Tbk | Sanurhasta Mitra vs. Lippo Karawaci Tbk | Sanurhasta Mitra vs. Mitra Pinasthika Mustika | Sanurhasta Mitra vs. Jakarta Int Hotels |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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