Correlation Between Trimegah Karya and Surya Biru

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Can any of the company-specific risk be diversified away by investing in both Trimegah Karya and Surya Biru 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 Trimegah Karya and Surya Biru into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trimegah Karya Pratama and Surya Biru Murni, you can compare the effects of market volatilities on Trimegah Karya and Surya Biru 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 Trimegah Karya with a short position of Surya Biru. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimegah Karya and Surya Biru.

Diversification Opportunities for Trimegah Karya and Surya Biru

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Trimegah and Surya is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Trimegah Karya Pratama and Surya Biru Murni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Biru Murni and Trimegah Karya 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 Trimegah Karya Pratama are associated (or correlated) with Surya Biru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Biru Murni has no effect on the direction of Trimegah Karya i.e., Trimegah Karya and Surya Biru go up and down completely randomly.

Pair Corralation between Trimegah Karya and Surya Biru

Assuming the 90 days trading horizon Trimegah Karya Pratama is expected to generate 2.95 times more return on investment than Surya Biru. However, Trimegah Karya is 2.95 times more volatile than Surya Biru Murni. It trades about 0.02 of its potential returns per unit of risk. Surya Biru Murni is currently generating about 0.01 per unit of risk. If you would invest  6,500  in Trimegah Karya Pratama on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Trimegah Karya Pratama or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Trimegah Karya Pratama  vs.  Surya Biru Murni

 Performance 
       Timeline  
Trimegah Karya Pratama 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Trimegah Karya Pratama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Surya Biru Murni 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Surya Biru Murni has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Surya Biru is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Trimegah Karya and Surya Biru Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Trimegah Karya and Surya Biru

The main advantage of trading using opposite Trimegah Karya and Surya Biru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trimegah Karya position performs unexpectedly, Surya Biru 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 Surya Biru will offset losses from the drop in Surya Biru's long position.
The idea behind Trimegah Karya Pratama and Surya Biru Murni 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.
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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