Correlation Between Surya Esa and Saratoga Investama

Can any of the company-specific risk be diversified away by investing in both Surya Esa and Saratoga Investama 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 Saratoga Investama 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 Saratoga Investama Sedaya, you can compare the effects of market volatilities on Surya Esa and Saratoga Investama 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 Saratoga Investama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Esa and Saratoga Investama.

Diversification Opportunities for Surya Esa and Saratoga Investama

0.64

Correlation Coefficient

Surya Esa  Saratoga Investama

Poor diversification

The 3 months correlation between Surya and Saratoga is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Surya Esa Perkasa and Saratoga Investama Sedaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investama Sedaya 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 Saratoga Investama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investama Sedaya has no effect on the direction of Surya Esa i.e., Surya Esa and Saratoga Investama go up and down completely randomly.

Pair Corralation between Surya Esa and Saratoga Investama

Assuming the 90 days trading horizon Surya Esa Perkasa is expected to under-perform the Saratoga Investama. But the stock apears to be less risky and, when comparing its historical volatility, Surya Esa Perkasa is 1.49 times less risky than Saratoga Investama. The stock trades about -0.2 of its potential returns per unit of risk. The Saratoga Investama Sedaya is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  209,000  in Saratoga Investama Sedaya on December 28, 2024 and sell it today you would lose (48,500) from holding Saratoga Investama Sedaya or give up 23.21% of portfolio value over 90 days.

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

Surya Esa Perkasa  vs.  Saratoga Investama Sedaya

Surya Esa Perkasa

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Saratoga Investama Sedaya

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saratoga Investama Sedaya 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Surya Esa and Saratoga Investama

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

The idea behind Surya Esa Perkasa and Saratoga Investama Sedaya 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.