Correlation Between PT Data and Solusi Sinergi

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

By analyzing existing cross correlation between PT Data Sinergitama and Solusi Sinergi Digital, you can compare the effects of market volatilities on PT Data and Solusi Sinergi 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 PT Data with a short position of Solusi Sinergi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Data and Solusi Sinergi.

Diversification Opportunities for PT Data and Solusi Sinergi

0.7

Correlation Coefficient

PT Data  Solusi Sinergi

Poor diversification

The 3 months correlation between ELIT and Solusi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and Solusi Sinergi Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solusi Sinergi Digital and PT Data 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 PT Data Sinergitama are associated (or correlated) with Solusi Sinergi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solusi Sinergi Digital has no effect on the direction of PT Data i.e., PT Data and Solusi Sinergi go up and down completely randomly.

Pair Corralation between PT Data and Solusi Sinergi

Assuming the 90 days trading horizon PT Data is expected to generate 10.91 times less return on investment than Solusi Sinergi. But when comparing it to its historical volatility, PT Data Sinergitama is 1.51 times less risky than Solusi Sinergi. It trades about 0.02 of its potential returns per unit of risk. Solusi Sinergi Digital is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  28,200  in Solusi Sinergi Digital on September 3, 2024 and sell it today you would earn a total of  14,800  from holding Solusi Sinergi Digital or generate 52.48% return on investment over 90 days.

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

PT Data Sinergitama  vs.  Solusi Sinergi Digital

PT Data Sinergitama

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Data Sinergitama are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, PT Data is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Solusi Sinergi Digital

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Solusi Sinergi Digital are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Solusi Sinergi disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Data and Solusi Sinergi

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

The idea behind PT Data Sinergitama and Solusi Sinergi Digital 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.