Correlation Between Proximus and PT Sarana

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

By analyzing existing cross correlation between Proximus NV ADR and PT Sarana Menara, you can compare the effects of market volatilities on Proximus and PT Sarana 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 Proximus with a short position of PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proximus and PT Sarana.

Diversification Opportunities for Proximus and PT Sarana

0.0

Correlation Coefficient

Proximus  PT Sarana

Pay attention - limited upside

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

Pair Corralation between Proximus and PT Sarana

If you would invest  103.00  in Proximus NV ADR on December 30, 2024 and sell it today you would earn a total of  40.00  from holding Proximus NV ADR or generate 38.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Proximus NV ADR  vs.  PT Sarana Menara

Proximus NV ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Proximus NV ADR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Proximus showed solid returns over the last few months and may actually be approaching a breakup point.

PT Sarana Menara

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Sarana Menara has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PT Sarana is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Proximus and PT Sarana

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

The idea behind Proximus NV ADR and PT Sarana Menara 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.