Correlation Between Alam Sutera and Surya Semesta

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

By analyzing existing cross correlation between Alam Sutera Realty and Surya Semesta Internusa, you can compare the effects of market volatilities on Alam Sutera and Surya Semesta 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 Alam Sutera with a short position of Surya Semesta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alam Sutera and Surya Semesta.

Diversification Opportunities for Alam Sutera and Surya Semesta

0.66

Correlation Coefficient

Alam Sutera  Surya Semesta

Poor diversification

The 3 months correlation between Alam and Surya is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Alam Sutera Realty and Surya Semesta Internusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Semesta Internusa and Alam Sutera 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 Alam Sutera Realty are associated (or correlated) with Surya Semesta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Semesta Internusa has no effect on the direction of Alam Sutera i.e., Alam Sutera and Surya Semesta go up and down completely randomly.

Pair Corralation between Alam Sutera and Surya Semesta

Assuming the 90 days trading horizon Alam Sutera Realty is expected to generate 0.76 times more return on investment than Surya Semesta. However, Alam Sutera Realty is 1.32 times less risky than Surya Semesta. It trades about -0.11 of its potential returns per unit of risk. Surya Semesta Internusa is currently generating about -0.2 per unit of risk. If you would invest  13,400  in Alam Sutera Realty on December 30, 2024 and sell it today you would lose (2,400) from holding Alam Sutera Realty or give up 17.91% of portfolio value over 90 days.

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

Alam Sutera Realty  vs.  Surya Semesta Internusa

Alam Sutera Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alam Sutera Realty 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Surya Semesta Internusa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Surya Semesta Internusa 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Alam Sutera and Surya Semesta

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

The idea behind Alam Sutera Realty and Surya Semesta Internusa 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.