Correlation Between PT Sarana and Vodafone Group

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

Diversification Opportunities for PT Sarana and Vodafone Group

0.16

Correlation Coefficient

PT Sarana  Vodafone Group

Average diversification

The 3 months correlation between SMNUF and Vodafone is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PT Sarana Menara and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of PT Sarana i.e., PT Sarana and Vodafone Group go up and down completely randomly.

Pair Corralation between PT Sarana and Vodafone Group

If you would invest  3.00  in PT Sarana Menara on August 30, 2024 and sell it today you would earn a total of  0.00  from holding PT Sarana Menara or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

PT Sarana Menara  vs.  Vodafone Group PLC

PT Sarana Menara

Risk-Adjusted Performance

0 of 100

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.

Vodafone Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PT Sarana and Vodafone Group

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

The idea behind PT Sarana Menara and Vodafone Group PLC 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.