Correlation Between Suparma Tbk and Petrosea Tbk
Can any of the company-specific risk be diversified away by investing in both Suparma Tbk and Petrosea Tbk 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 Suparma Tbk and Petrosea Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suparma Tbk and Petrosea Tbk, you can compare the effects of market volatilities on Suparma Tbk and Petrosea Tbk 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 Suparma Tbk with a short position of Petrosea Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suparma Tbk and Petrosea Tbk.
Diversification Opportunities for Suparma Tbk and Petrosea Tbk
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Suparma and Petrosea is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Suparma Tbk and Petrosea Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrosea Tbk and Suparma Tbk 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 Suparma Tbk are associated (or correlated) with Petrosea Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrosea Tbk has no effect on the direction of Suparma Tbk i.e., Suparma Tbk and Petrosea Tbk go up and down completely randomly.
Pair Corralation between Suparma Tbk and Petrosea Tbk
Assuming the 90 days trading horizon Suparma Tbk is expected to under-perform the Petrosea Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Suparma Tbk is 4.23 times less risky than Petrosea Tbk. The stock trades about -0.08 of its potential returns per unit of risk. The Petrosea Tbk is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 276,250 in Petrosea Tbk on December 29, 2024 and sell it today you would lose (32,250) from holding Petrosea Tbk or give up 11.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Suparma Tbk vs. Petrosea Tbk
Performance |
Timeline |
Suparma Tbk |
Petrosea Tbk |
Suparma Tbk and Petrosea Tbk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Suparma Tbk and Petrosea Tbk
The main advantage of trading using opposite Suparma Tbk and Petrosea Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suparma Tbk position performs unexpectedly, Petrosea Tbk 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 Petrosea Tbk will offset losses from the drop in Petrosea Tbk's long position.Suparma Tbk vs. Trias Sentosa Tbk | Suparma Tbk vs. Slj Global Tbk | Suparma Tbk vs. PT Sreeya Sewu | Suparma Tbk vs. Indo Acidatama Tbk |
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Check out your portfolio center.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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