Correlation Between Surya Citra and Tower Bersama

Can any of the company-specific risk be diversified away by investing in both Surya Citra and Tower Bersama 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 Tower Bersama 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 Tower Bersama Infrastructure, you can compare the effects of market volatilities on Surya Citra and Tower Bersama 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 Tower Bersama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Citra and Tower Bersama.

Diversification Opportunities for Surya Citra and Tower Bersama

0.72

Correlation Coefficient

Surya Citra  Tower Bersama

Poor diversification

The 3 months correlation between Surya and Tower is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Surya Citra Media and Tower Bersama Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Bersama Infras 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 Tower Bersama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Bersama Infras has no effect on the direction of Surya Citra i.e., Surya Citra and Tower Bersama go up and down completely randomly.

Pair Corralation between Surya Citra and Tower Bersama

Assuming the 90 days trading horizon Surya Citra Media is expected to generate 3.5 times more return on investment than Tower Bersama. However, Surya Citra is 3.5 times more volatile than Tower Bersama Infrastructure. It trades about 0.15 of its potential returns per unit of risk. Tower Bersama Infrastructure is currently generating about 0.07 per unit of risk. If you would invest  11,716  in Surya Citra Media on September 28, 2024 and sell it today you would earn a total of  4,284  from holding Surya Citra Media or generate 36.57% return on investment over 90 days.

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

Surya Citra Media  vs.  Tower Bersama Infrastructure

Surya Citra Media

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Surya Citra Media are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Surya Citra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Tower Bersama Infras

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tower Bersama Infrastructure are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Tower Bersama is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Surya Citra and Tower Bersama

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

The idea behind Surya Citra Media and Tower Bersama Infrastructure 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.