Correlation Between Steady Safe and Rukun Raharja

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

By analyzing existing cross correlation between Steady Safe TBK and Rukun Raharja Tbk, you can compare the effects of market volatilities on Steady Safe and Rukun Raharja 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 Steady Safe with a short position of Rukun Raharja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steady Safe and Rukun Raharja.

Diversification Opportunities for Steady Safe and Rukun Raharja

0.29

Correlation Coefficient

Steady Safe  Rukun Raharja

Modest diversification

The 3 months correlation between Steady and Rukun is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Steady Safe TBK and Rukun Raharja Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rukun Raharja Tbk and Steady Safe 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 Steady Safe TBK are associated (or correlated) with Rukun Raharja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rukun Raharja Tbk has no effect on the direction of Steady Safe i.e., Steady Safe and Rukun Raharja go up and down completely randomly.

Pair Corralation between Steady Safe and Rukun Raharja

Assuming the 90 days trading horizon Steady Safe TBK is expected to generate 1.35 times more return on investment than Rukun Raharja. However, Steady Safe is 1.35 times more volatile than Rukun Raharja Tbk. It trades about 0.06 of its potential returns per unit of risk. Rukun Raharja Tbk is currently generating about -0.06 per unit of risk. If you would invest  19,800  in Steady Safe TBK on December 30, 2024 and sell it today you would earn a total of  2,200  from holding Steady Safe TBK or generate 11.11% return on investment over 90 days.

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

Steady Safe TBK  vs.  Rukun Raharja Tbk

Steady Safe TBK

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Steady Safe TBK are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Steady Safe disclosed solid returns over the last few months and may actually be approaching a breakup point.

Rukun Raharja Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rukun Raharja Tbk 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 Steady Safe and Rukun Raharja

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

The idea behind Steady Safe TBK and Rukun Raharja 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.

Check out your portfolio center.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.