Correlation Between Agro Yasa and Satyamitra Kemas

Can any of the company-specific risk be diversified away by investing in both Agro Yasa and Satyamitra Kemas 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 Agro Yasa and Satyamitra Kemas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agro Yasa Lestari and Satyamitra Kemas Lestari, you can compare the effects of market volatilities on Agro Yasa and Satyamitra Kemas 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 Agro Yasa with a short position of Satyamitra Kemas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agro Yasa and Satyamitra Kemas.

Diversification Opportunities for Agro Yasa and Satyamitra Kemas

0.37

Correlation Coefficient

Agro Yasa  Satyamitra Kemas

Weak diversification

The 3 months correlation between Agro and Satyamitra is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Agro Yasa Lestari and Satyamitra Kemas Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satyamitra Kemas Lestari and Agro Yasa 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 Agro Yasa Lestari are associated (or correlated) with Satyamitra Kemas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satyamitra Kemas Lestari has no effect on the direction of Agro Yasa i.e., Agro Yasa and Satyamitra Kemas go up and down completely randomly.

Pair Corralation between Agro Yasa and Satyamitra Kemas

Assuming the 90 days trading horizon Agro Yasa Lestari is expected to under-perform the Satyamitra Kemas. But the stock apears to be less risky and, when comparing its historical volatility, Agro Yasa Lestari is 1.23 times less risky than Satyamitra Kemas. The stock trades about -0.23 of its potential returns per unit of risk. The Satyamitra Kemas Lestari is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  16,500  in Satyamitra Kemas Lestari on December 25, 2024 and sell it today you would lose (1,800) from holding Satyamitra Kemas Lestari or give up 10.91% of portfolio value over 90 days.

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

Agro Yasa Lestari  vs.  Satyamitra Kemas Lestari

Agro Yasa Lestari

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agro Yasa Lestari has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Satyamitra Kemas Lestari

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Agro Yasa and Satyamitra Kemas

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

The idea behind Agro Yasa Lestari and Satyamitra Kemas Lestari 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.