Correlation Between PT Semen and Spindletop

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

By analyzing existing cross correlation between PT Semen Indonesia and Spindletop OG, you can compare the effects of market volatilities on PT Semen and Spindletop 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 PT Semen with a short position of Spindletop. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Semen and Spindletop.

Diversification Opportunities for PT Semen and Spindletop

-0.66

Correlation Coefficient

PT Semen  Spindletop

Excellent diversification

The 3 months correlation between PSGTF and Spindletop is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding PT Semen Indonesia and Spindletop OG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spindletop OG and PT Semen 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 PT Semen Indonesia are associated (or correlated) with Spindletop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spindletop OG has no effect on the direction of PT Semen i.e., PT Semen and Spindletop go up and down completely randomly.

Pair Corralation between PT Semen and Spindletop

Assuming the 90 days horizon PT Semen Indonesia is expected to under-perform the Spindletop. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Semen Indonesia is 4.11 times less risky than Spindletop. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Spindletop OG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  200.00  in Spindletop OG on December 21, 2024 and sell it today you would earn a total of  50.00  from holding Spindletop OG or generate 25.0% return on investment over 90 days.

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

PT Semen Indonesia  vs.  Spindletop OG

PT Semen Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Semen Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Spindletop OG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Spindletop OG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Spindletop exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Semen and Spindletop

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

The idea behind PT Semen Indonesia and Spindletop OG 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.