Correlation Between SBA Communications and INDO-RAMA SYNTHETIC

Can any of the company-specific risk be diversified away by investing in both SBA Communications and INDO-RAMA SYNTHETIC 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 SBA Communications and INDO-RAMA SYNTHETIC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SBA Communications Corp and INDO RAMA SYNTHETIC, you can compare the effects of market volatilities on SBA Communications and INDO-RAMA SYNTHETIC 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 SBA Communications with a short position of INDO-RAMA SYNTHETIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and INDO-RAMA SYNTHETIC.

Diversification Opportunities for SBA Communications and INDO-RAMA SYNTHETIC

0.0

Correlation Coefficient

SBA Communications  INDO-RAMA SYNTHETIC

Pay attention - limited upside

The 3 months correlation between SBA and INDO-RAMA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and INDO RAMA SYNTHETIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDO RAMA SYNTHETIC and SBA Communications 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 SBA Communications Corp are associated (or correlated) with INDO-RAMA SYNTHETIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDO RAMA SYNTHETIC has no effect on the direction of SBA Communications i.e., SBA Communications and INDO-RAMA SYNTHETIC go up and down completely randomly.

Pair Corralation between SBA Communications and INDO-RAMA SYNTHETIC

If you would invest  20,820  in SBA Communications Corp on December 4, 2024 and sell it today you would earn a total of  260.00  from holding SBA Communications Corp or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SBA Communications Corp  vs.  INDO RAMA SYNTHETIC

SBA Communications Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SBA Communications Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SBA Communications is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

INDO RAMA SYNTHETIC

Risk-Adjusted Performance

Very Weak

Over the last 90 days INDO RAMA SYNTHETIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, INDO-RAMA SYNTHETIC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SBA Communications and INDO-RAMA SYNTHETIC

The main advantage of trading using opposite SBA Communications and INDO-RAMA SYNTHETIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications position performs unexpectedly, INDO-RAMA SYNTHETIC 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 INDO-RAMA SYNTHETIC will offset losses from the drop in INDO-RAMA SYNTHETIC's long position.

The idea behind SBA Communications Corp and INDO RAMA SYNTHETIC 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.