Correlation Between PT Sunter and Ulima Nitra

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

By analyzing existing cross correlation between PT Sunter Lakeside and Ulima Nitra PT, you can compare the effects of market volatilities on PT Sunter and Ulima Nitra 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 Sunter with a short position of Ulima Nitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sunter and Ulima Nitra.

Diversification Opportunities for PT Sunter and Ulima Nitra

0.68

Correlation Coefficient

PT Sunter  Ulima Nitra

Poor diversification

The 3 months correlation between SNLK and Ulima is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT Sunter Lakeside and Ulima Nitra PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ulima Nitra PT and PT Sunter 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 Sunter Lakeside are associated (or correlated) with Ulima Nitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ulima Nitra PT has no effect on the direction of PT Sunter i.e., PT Sunter and Ulima Nitra go up and down completely randomly.

Pair Corralation between PT Sunter and Ulima Nitra

Assuming the 90 days trading horizon PT Sunter Lakeside is expected to under-perform the Ulima Nitra. In addition to that, PT Sunter is 1.47 times more volatile than Ulima Nitra PT. It trades about -0.06 of its total potential returns per unit of risk. Ulima Nitra PT is currently generating about 0.17 per unit of volatility. If you would invest  43,800  in Ulima Nitra PT on December 29, 2024 and sell it today you would earn a total of  12,200  from holding Ulima Nitra PT or generate 27.85% return on investment over 90 days.

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

PT Sunter Lakeside  vs.  Ulima Nitra PT

PT Sunter Lakeside

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Sunter Lakeside has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ulima Nitra PT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ulima Nitra PT are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Ulima Nitra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Sunter and Ulima Nitra

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

The idea behind PT Sunter Lakeside and Ulima Nitra PT 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.