Correlation Between Akr Corporindo and Semen Indonesia

Can any of the company-specific risk be diversified away by investing in both Akr Corporindo and Semen Indonesia 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 Akr Corporindo and Semen Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akr Corporindo Tbk and Semen Indonesia Persero, you can compare the effects of market volatilities on Akr Corporindo and Semen Indonesia 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 Akr Corporindo with a short position of Semen Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akr Corporindo and Semen Indonesia.

Diversification Opportunities for Akr Corporindo and Semen Indonesia

0.62

Correlation Coefficient

Akr Corporindo  Semen Indonesia

Poor diversification

The 3 months correlation between Akr and Semen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Akr Corporindo Tbk and Semen Indonesia Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semen Indonesia Persero and Akr Corporindo 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 Akr Corporindo Tbk are associated (or correlated) with Semen Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semen Indonesia Persero has no effect on the direction of Akr Corporindo i.e., Akr Corporindo and Semen Indonesia go up and down completely randomly.

Pair Corralation between Akr Corporindo and Semen Indonesia

Assuming the 90 days trading horizon Akr Corporindo Tbk is expected to generate 0.91 times more return on investment than Semen Indonesia. However, Akr Corporindo Tbk is 1.1 times less risky than Semen Indonesia. It trades about -0.05 of its potential returns per unit of risk. Semen Indonesia Persero is currently generating about -0.11 per unit of risk. If you would invest  147,000  in Akr Corporindo Tbk on September 12, 2024 and sell it today you would lose (11,500) from holding Akr Corporindo Tbk or give up 7.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Akr Corporindo Tbk  vs.  Semen Indonesia Persero

Akr Corporindo Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akr Corporindo Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Semen Indonesia Persero

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Semen Indonesia Persero 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Akr Corporindo and Semen Indonesia

The main advantage of trading using opposite Akr Corporindo and Semen Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akr Corporindo position performs unexpectedly, Semen Indonesia 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 Semen Indonesia will offset losses from the drop in Semen Indonesia's long position.

The idea behind Akr Corporindo Tbk and Semen Indonesia Persero 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..