Correlation Between Suparma Tbk and Trias Sentosa

Can any of the company-specific risk be diversified away by investing in both Suparma Tbk and Trias Sentosa 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 Trias Sentosa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Suparma Tbk and Trias Sentosa Tbk, you can compare the effects of market volatilities on Suparma Tbk and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suparma Tbk and Trias Sentosa.

Diversification Opportunities for Suparma Tbk and Trias Sentosa

0.59

Correlation Coefficient

Suparma Tbk  Trias Sentosa

Very weak diversification

The 3 months correlation between Suparma and Trias is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Suparma Tbk and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Suparma Tbk i.e., Suparma Tbk and Trias Sentosa go up and down completely randomly.

Pair Corralation between Suparma Tbk and Trias Sentosa

Assuming the 90 days trading horizon Suparma Tbk is expected to generate 1.47 times more return on investment than Trias Sentosa. However, Suparma Tbk is 1.47 times more volatile than Trias Sentosa Tbk. It trades about -0.08 of its potential returns per unit of risk. Trias Sentosa Tbk is currently generating about -0.26 per unit of risk. If you would invest  29,600  in Suparma Tbk on December 30, 2024 and sell it today you would lose (2,400) from holding Suparma Tbk or give up 8.11% of portfolio value over 90 days.

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

Suparma Tbk  vs.  Trias Sentosa Tbk

Suparma Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Suparma Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Trias Sentosa Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trias Sentosa Tbk 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.

Pair Trading with Suparma Tbk and Trias Sentosa

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

The idea behind Suparma Tbk and Trias Sentosa Tbk 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.