Correlation Between Surya Esa and Dharma Satya

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

By analyzing existing cross correlation between Surya Esa Perkasa and Dharma Satya Nusantara, you can compare the effects of market volatilities on Surya Esa and Dharma Satya 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 Surya Esa with a short position of Dharma Satya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Esa and Dharma Satya.

Diversification Opportunities for Surya Esa and Dharma Satya

0.03

Correlation Coefficient

Surya Esa  Dharma Satya

Significant diversification

The 3 months correlation between Surya and Dharma is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Surya Esa Perkasa and Dharma Satya Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dharma Satya Nusantara and Surya Esa 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 Surya Esa Perkasa are associated (or correlated) with Dharma Satya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dharma Satya Nusantara has no effect on the direction of Surya Esa i.e., Surya Esa and Dharma Satya go up and down completely randomly.

Pair Corralation between Surya Esa and Dharma Satya

Assuming the 90 days trading horizon Surya Esa is expected to generate 19.93 times less return on investment than Dharma Satya. But when comparing it to its historical volatility, Surya Esa Perkasa is 1.63 times less risky than Dharma Satya. It trades about 0.01 of its potential returns per unit of risk. Dharma Satya Nusantara is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  84,000  in Dharma Satya Nusantara on September 13, 2024 and sell it today you would earn a total of  21,500  from holding Dharma Satya Nusantara or generate 25.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Surya Esa Perkasa  vs.  Dharma Satya Nusantara

Surya Esa Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

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

Dharma Satya Nusantara

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dharma Satya Nusantara are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Dharma Satya disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Surya Esa and Dharma Satya

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

The idea behind Surya Esa Perkasa and Dharma Satya Nusantara 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..