Correlation Between Surya Citra and Kimia Farma
Can any of the company-specific risk be diversified away by investing in both Surya Citra and Kimia Farma 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 Surya Citra and Kimia Farma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surya Citra Media and Kimia Farma Persero, you can compare the effects of market volatilities on Surya Citra and Kimia Farma 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 Surya Citra with a short position of Kimia Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Citra and Kimia Farma.
Diversification Opportunities for Surya Citra and Kimia Farma
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Surya and Kimia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Surya Citra Media and Kimia Farma Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimia Farma Persero and Surya Citra 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 Surya Citra Media are associated (or correlated) with Kimia Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimia Farma Persero has no effect on the direction of Surya Citra i.e., Surya Citra and Kimia Farma go up and down completely randomly.
Pair Corralation between Surya Citra and Kimia Farma
Assuming the 90 days trading horizon Surya Citra Media is expected to generate 1.34 times more return on investment than Kimia Farma. However, Surya Citra is 1.34 times more volatile than Kimia Farma Persero. It trades about 0.16 of its potential returns per unit of risk. Kimia Farma Persero is currently generating about -0.04 per unit of risk. If you would invest 13,100 in Surya Citra Media on December 1, 2024 and sell it today you would earn a total of 6,000 from holding Surya Citra Media or generate 45.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Surya Citra Media vs. Kimia Farma Persero
Performance |
Timeline |
Surya Citra Media |
Kimia Farma Persero |
Surya Citra and Kimia Farma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Surya Citra and Kimia Farma
The main advantage of trading using opposite Surya Citra and Kimia Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surya Citra position performs unexpectedly, Kimia Farma 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 Kimia Farma will offset losses from the drop in Kimia Farma's long position.Surya Citra vs. Media Nusantara Citra | Surya Citra vs. Matahari Department Store | Surya Citra vs. Akr Corporindo Tbk | Surya Citra vs. XL Axiata Tbk |
Kimia Farma vs. Indofarma Tbk | Kimia Farma vs. Kalbe Farma Tbk | Kimia Farma vs. Wijaya Karya Beton | Kimia Farma vs. Adhi Karya Persero |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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