Correlation Between PT Sarana and KDDI Corp

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

Diversification Opportunities for PT Sarana and KDDI Corp

0.0

Correlation Coefficient

PT Sarana  KDDI Corp

Pay attention - limited upside

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

Pair Corralation between PT Sarana and KDDI Corp

If you would invest  1,720  in KDDI Corp on December 29, 2024 and sell it today you would lose (280.00) from holding KDDI Corp or give up 16.28% of portfolio value over 90 days.

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

PT Sarana Menara  vs.  KDDI Corp

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.

KDDI Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KDDI Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, KDDI Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Sarana and KDDI Corp

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

The idea behind PT Sarana Menara and KDDI Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.