Correlation Between Saraswanti Anugerah and Cisadane Sawit

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

By analyzing existing cross correlation between Saraswanti Anugerah Makmur and Cisadane Sawit Raya, you can compare the effects of market volatilities on Saraswanti Anugerah and Cisadane Sawit 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 Saraswanti Anugerah with a short position of Cisadane Sawit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saraswanti Anugerah and Cisadane Sawit.

Diversification Opportunities for Saraswanti Anugerah and Cisadane Sawit

0.36

Correlation Coefficient

Saraswanti Anugerah  Cisadane Sawit

Weak diversification

The 3 months correlation between Saraswanti and Cisadane is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Saraswanti Anugerah Makmur and Cisadane Sawit Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisadane Sawit Raya and Saraswanti Anugerah 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 Saraswanti Anugerah Makmur are associated (or correlated) with Cisadane Sawit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisadane Sawit Raya has no effect on the direction of Saraswanti Anugerah i.e., Saraswanti Anugerah and Cisadane Sawit go up and down completely randomly.

Pair Corralation between Saraswanti Anugerah and Cisadane Sawit

Assuming the 90 days trading horizon Saraswanti Anugerah Makmur is expected to under-perform the Cisadane Sawit. In addition to that, Saraswanti Anugerah is 3.97 times more volatile than Cisadane Sawit Raya. It trades about -0.02 of its total potential returns per unit of risk. Cisadane Sawit Raya is currently generating about -0.08 per unit of volatility. If you would invest  72,500  in Cisadane Sawit Raya on December 30, 2024 and sell it today you would lose (5,000) from holding Cisadane Sawit Raya or give up 6.9% of portfolio value over 90 days.

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

Saraswanti Anugerah Makmur  vs.  Cisadane Sawit Raya

Saraswanti Anugerah

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saraswanti Anugerah Makmur has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Cisadane Sawit Raya

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cisadane Sawit Raya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Saraswanti Anugerah and Cisadane Sawit

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

The idea behind Saraswanti Anugerah Makmur and Cisadane Sawit Raya 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.