Correlation Between Surya Permata and Pollux Investasi

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

By analyzing existing cross correlation between Surya Permata Andalan and Pollux Investasi Internasional, you can compare the effects of market volatilities on Surya Permata and Pollux Investasi 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 Permata with a short position of Pollux Investasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Permata and Pollux Investasi.

Diversification Opportunities for Surya Permata and Pollux Investasi

-0.48

Correlation Coefficient

Surya Permata  Pollux Investasi

Very good diversification

The 3 months correlation between Surya and Pollux is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Surya Permata Andalan and Pollux Investasi Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollux Investasi Int and Surya Permata 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 Permata Andalan are associated (or correlated) with Pollux Investasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollux Investasi Int has no effect on the direction of Surya Permata i.e., Surya Permata and Pollux Investasi go up and down completely randomly.

Pair Corralation between Surya Permata and Pollux Investasi

Assuming the 90 days trading horizon Surya Permata Andalan is expected to generate 4.6 times more return on investment than Pollux Investasi. However, Surya Permata is 4.6 times more volatile than Pollux Investasi Internasional. It trades about -0.01 of its potential returns per unit of risk. Pollux Investasi Internasional is currently generating about -0.1 per unit of risk. If you would invest  15,900  in Surya Permata Andalan on December 30, 2024 and sell it today you would lose (400.00) from holding Surya Permata Andalan or give up 2.52% of portfolio value over 90 days.

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

Surya Permata Andalan  vs.  Pollux Investasi Internasional

Surya Permata Andalan

Risk-Adjusted Performance

Very Weak

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

Pollux Investasi Int

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pollux Investasi Internasional has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Pollux Investasi 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 Surya Permata and Pollux Investasi

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

The idea behind Surya Permata Andalan and Pollux Investasi Internasional 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.