Correlation Between Alkindo Naratama and Surya Biru

Can any of the company-specific risk be diversified away by investing in both Alkindo Naratama 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 Alkindo Naratama and Surya Biru into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alkindo Naratama Tbk and Surya Biru Murni, you can compare the effects of market volatilities on Alkindo Naratama 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 Alkindo Naratama with a short position of Surya Biru. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkindo Naratama and Surya Biru.

Diversification Opportunities for Alkindo Naratama and Surya Biru

-0.15

Correlation Coefficient

Alkindo Naratama  Surya Biru

Good diversification

The 3 months correlation between Alkindo and Surya is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Alkindo Naratama Tbk 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 Alkindo Naratama 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 Alkindo Naratama Tbk 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 Alkindo Naratama i.e., Alkindo Naratama and Surya Biru go up and down completely randomly.

Pair Corralation between Alkindo Naratama and Surya Biru

Assuming the 90 days trading horizon Alkindo Naratama Tbk is expected to generate 2.86 times more return on investment than Surya Biru. However, Alkindo Naratama is 2.86 times more volatile than Surya Biru Murni. It trades about 0.01 of its potential returns per unit of risk. Surya Biru Murni is currently generating about -0.1 per unit of risk. If you would invest  51,000  in Alkindo Naratama Tbk on October 27, 2024 and sell it today you would lose (500.00) from holding Alkindo Naratama Tbk or give up 0.98% of portfolio value over 90 days.

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

Alkindo Naratama Tbk  vs.  Surya Biru Murni

Alkindo Naratama Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

Surya Biru Murni

Risk-Adjusted Performance

0 of 100

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 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.

Pair Trading with Alkindo Naratama and Surya Biru

The main advantage of trading using opposite Alkindo Naratama and Surya Biru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkindo Naratama 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 Alkindo Naratama Tbk 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.