Correlation Between Unilever Indonesia and Supra Boga
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Supra Boga 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 Supra Boga 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 Supra Boga Lestari, you can compare the effects of market volatilities on Unilever Indonesia and Supra Boga 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 Supra Boga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Supra Boga.
Diversification Opportunities for Unilever Indonesia and Supra Boga
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Unilever and Supra is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Supra Boga Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supra Boga Lestari 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 Supra Boga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supra Boga Lestari has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Supra Boga go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Supra Boga
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to generate 1.7 times more return on investment than Supra Boga. However, Unilever Indonesia is 1.7 times more volatile than Supra Boga Lestari. It trades about -0.04 of its potential returns per unit of risk. Supra Boga Lestari is currently generating about -0.11 per unit of risk. If you would invest 196,000 in Unilever Indonesia Tbk on August 31, 2024 and sell it today you would lose (6,000) from holding Unilever Indonesia Tbk or give up 3.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Supra Boga Lestari
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Supra Boga Lestari |
Unilever Indonesia and Supra Boga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Supra Boga
The main advantage of trading using opposite Unilever Indonesia and Supra Boga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Supra Boga 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 Supra Boga will offset losses from the drop in Supra Boga'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 |
| Supra Boga vs. Nippon Indosari Corpindo | Supra Boga vs. Ramayana Lestari Sentosa | Supra Boga vs. Midi Utama Indonesia | Supra Boga vs. Hero Supermarket 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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