Correlation Between PT Sarana and Proximus

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

By analyzing existing cross correlation between PT Sarana Menara and Proximus NV ADR, you can compare the effects of market volatilities on PT Sarana and Proximus 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 Sarana with a short position of Proximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sarana and Proximus.

Diversification Opportunities for PT Sarana and Proximus

0.0

Correlation Coefficient

PT Sarana  Proximus

Pay attention - limited upside

The 3 months correlation between SMNUF and Proximus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Sarana Menara and Proximus NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximus NV ADR and PT Sarana 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 Sarana Menara are associated (or correlated) with Proximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximus NV ADR has no effect on the direction of PT Sarana i.e., PT Sarana and Proximus go up and down completely randomly.

Pair Corralation between PT Sarana and Proximus

If you would invest (100.00) in PT Sarana Menara on November 28, 2024 and sell it today you would earn a total of  100.00  from holding PT Sarana Menara or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PT Sarana Menara  vs.  Proximus NV ADR

PT Sarana Menara

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Sarana Menara has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PT Sarana is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Proximus NV ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Proximus NV ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with PT Sarana and Proximus

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

The idea behind PT Sarana Menara and Proximus NV ADR 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 Global Correlations module to find global opportunities by holding instruments from different markets.