Correlation Between Sinergi Inti and Cisadane Sawit

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

By analyzing existing cross correlation between Sinergi Inti Plastindo and Cisadane Sawit Raya, you can compare the effects of market volatilities on Sinergi Inti and Cisadane Sawit 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 Sinergi Inti with a short position of Cisadane Sawit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinergi Inti and Cisadane Sawit.

Diversification Opportunities for Sinergi Inti and Cisadane Sawit

-0.34

Correlation Coefficient

Sinergi Inti  Cisadane Sawit

Very good diversification

The 3 months correlation between Sinergi and Cisadane is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sinergi Inti Plastindo and Cisadane Sawit Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisadane Sawit Raya and Sinergi Inti 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 Sinergi Inti Plastindo are associated (or correlated) with Cisadane Sawit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisadane Sawit Raya has no effect on the direction of Sinergi Inti i.e., Sinergi Inti and Cisadane Sawit go up and down completely randomly.

Pair Corralation between Sinergi Inti and Cisadane Sawit

Assuming the 90 days trading horizon Sinergi Inti Plastindo is expected to generate 1.92 times more return on investment than Cisadane Sawit. However, Sinergi Inti is 1.92 times more volatile than Cisadane Sawit Raya. It trades about 0.09 of its potential returns per unit of risk. Cisadane Sawit Raya is currently generating about -0.2 per unit of risk. If you would invest  2,200  in Sinergi Inti Plastindo on October 24, 2024 and sell it today you would earn a total of  100.00  from holding Sinergi Inti Plastindo or generate 4.55% return on investment over 90 days.

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

Sinergi Inti Plastindo  vs.  Cisadane Sawit Raya

Sinergi Inti Plastindo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinergi Inti Plastindo 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Cisadane Sawit Raya

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cisadane Sawit Raya are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Cisadane Sawit is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sinergi Inti and Cisadane Sawit

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

The idea behind Sinergi Inti Plastindo and Cisadane Sawit Raya 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.