Correlation Between Phapros Tbk and Sarana Meditama

Can any of the company-specific risk be diversified away by investing in both Phapros Tbk and Sarana Meditama 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 Phapros Tbk and Sarana Meditama into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Phapros Tbk PT and Sarana Meditama Metropolitan, you can compare the effects of market volatilities on Phapros Tbk and Sarana Meditama 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 Phapros Tbk with a short position of Sarana Meditama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phapros Tbk and Sarana Meditama.

Diversification Opportunities for Phapros Tbk and Sarana Meditama

0.67

Correlation Coefficient

Phapros Tbk  Sarana Meditama

Poor diversification

The 3 months correlation between Phapros and Sarana is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Phapros Tbk PT and Sarana Meditama Metropolitan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarana Meditama Metr and Phapros Tbk 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 Phapros Tbk PT are associated (or correlated) with Sarana Meditama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarana Meditama Metr has no effect on the direction of Phapros Tbk i.e., Phapros Tbk and Sarana Meditama go up and down completely randomly.

Pair Corralation between Phapros Tbk and Sarana Meditama

Assuming the 90 days trading horizon Phapros Tbk PT is expected to under-perform the Sarana Meditama. In addition to that, Phapros Tbk is 1.41 times more volatile than Sarana Meditama Metropolitan. It trades about -0.34 of its total potential returns per unit of risk. Sarana Meditama Metropolitan is currently generating about -0.32 per unit of volatility. If you would invest  29,200  in Sarana Meditama Metropolitan on September 1, 2024 and sell it today you would lose (4,200) from holding Sarana Meditama Metropolitan or give up 14.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Phapros Tbk PT  vs.  Sarana Meditama Metropolitan

Phapros Tbk PT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phapros Tbk PT 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 December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sarana Meditama Metr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sarana Meditama Metropolitan 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 December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Phapros Tbk and Sarana Meditama

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

The idea behind Phapros Tbk PT and Sarana Meditama Metropolitan 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.