Correlation Between PT Soho and Surya Fajar

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

By analyzing existing cross correlation between PT Soho Global and Surya Fajar Capital, you can compare the effects of market volatilities on PT Soho and Surya Fajar 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 Soho with a short position of Surya Fajar. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Soho and Surya Fajar.

Diversification Opportunities for PT Soho and Surya Fajar

-0.08

Correlation Coefficient

PT Soho  Surya Fajar

Good diversification

The 3 months correlation between SOHO and Surya is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PT Soho Global and Surya Fajar Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Fajar Capital and PT Soho 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 Soho Global are associated (or correlated) with Surya Fajar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Fajar Capital has no effect on the direction of PT Soho i.e., PT Soho and Surya Fajar go up and down completely randomly.

Pair Corralation between PT Soho and Surya Fajar

Assuming the 90 days trading horizon PT Soho is expected to generate 1.43 times less return on investment than Surya Fajar. In addition to that, PT Soho is 6.56 times more volatile than Surya Fajar Capital. It trades about 0.01 of its total potential returns per unit of risk. Surya Fajar Capital is currently generating about 0.11 per unit of volatility. If you would invest  183,000  in Surya Fajar Capital on December 29, 2024 and sell it today you would earn a total of  4,000  from holding Surya Fajar Capital or generate 2.19% return on investment over 90 days.

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

PT Soho Global  vs.  Surya Fajar Capital

PT Soho Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Soho Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Soho is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Surya Fajar Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Surya Fajar Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Surya Fajar 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 PT Soho and Surya Fajar

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

The idea behind PT Soho Global and Surya Fajar Capital 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.