Correlation Between Indonesia Prima and Suryamas Dutamakmur

Can any of the company-specific risk be diversified away by investing in both Indonesia Prima and Suryamas Dutamakmur 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 Indonesia Prima and Suryamas Dutamakmur into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indonesia Prima Property and Suryamas Dutamakmur Tbk, you can compare the effects of market volatilities on Indonesia Prima and Suryamas Dutamakmur 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 Indonesia Prima with a short position of Suryamas Dutamakmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Prima and Suryamas Dutamakmur.

Diversification Opportunities for Indonesia Prima and Suryamas Dutamakmur

0.12

Correlation Coefficient

Indonesia Prima  Suryamas Dutamakmur

Average diversification

The 3 months correlation between Indonesia and Suryamas is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Prima Property and Suryamas Dutamakmur Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suryamas Dutamakmur Tbk and Indonesia Prima 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 Indonesia Prima Property are associated (or correlated) with Suryamas Dutamakmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suryamas Dutamakmur Tbk has no effect on the direction of Indonesia Prima i.e., Indonesia Prima and Suryamas Dutamakmur go up and down completely randomly.

Pair Corralation between Indonesia Prima and Suryamas Dutamakmur

Assuming the 90 days trading horizon Indonesia Prima is expected to generate 1.52 times less return on investment than Suryamas Dutamakmur. But when comparing it to its historical volatility, Indonesia Prima Property is 1.02 times less risky than Suryamas Dutamakmur. It trades about 0.07 of its potential returns per unit of risk. Suryamas Dutamakmur Tbk is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  49,200  in Suryamas Dutamakmur Tbk on September 12, 2024 and sell it today you would earn a total of  2,300  from holding Suryamas Dutamakmur Tbk or generate 4.67% return on investment over 90 days.

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

Indonesia Prima Property  vs.  Suryamas Dutamakmur Tbk

Indonesia Prima Property

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Indonesia Prima Property are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Indonesia Prima is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Suryamas Dutamakmur Tbk

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Suryamas Dutamakmur Tbk are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Suryamas Dutamakmur 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 Indonesia Prima and Suryamas Dutamakmur

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

The idea behind Indonesia Prima Property and Suryamas Dutamakmur Tbk 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.