Correlation Between Salesforce and Sejahtera Bintang

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

By analyzing existing cross correlation between Salesforce and Sejahtera Bintang Abadi, you can compare the effects of market volatilities on Salesforce and Sejahtera Bintang 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 Salesforce with a short position of Sejahtera Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Sejahtera Bintang.

Diversification Opportunities for Salesforce and Sejahtera Bintang

0.0

Correlation Coefficient

Salesforce  Sejahtera Bintang

Pay attention - limited upside

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

Pair Corralation between Salesforce and Sejahtera Bintang

Considering the 90-day investment horizon Salesforce is expected to generate 2.63 times less return on investment than Sejahtera Bintang. But when comparing it to its historical volatility, Salesforce is 8.61 times less risky than Sejahtera Bintang. It trades about 0.09 of its potential returns per unit of risk. Sejahtera Bintang Abadi is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5,000  in Sejahtera Bintang Abadi on October 11, 2024 and sell it today you would lose (4,900) from holding Sejahtera Bintang Abadi or give up 98.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.55%
Values	Daily Returns

Salesforce  vs.  Sejahtera Bintang Abadi

Salesforce

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Sejahtera Bintang Abadi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sejahtera Bintang Abadi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sejahtera Bintang 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 Salesforce and Sejahtera Bintang

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

The idea behind Salesforce and Sejahtera Bintang Abadi 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.