Correlation Between Sawit Sumbermas and Surya Citra

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

By analyzing existing cross correlation between Sawit Sumbermas Sarana and Surya Citra Media, you can compare the effects of market volatilities on Sawit Sumbermas and Surya Citra 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 Sawit Sumbermas with a short position of Surya Citra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sawit Sumbermas and Surya Citra.

Diversification Opportunities for Sawit Sumbermas and Surya Citra

0.49

Correlation Coefficient

Sawit Sumbermas  Surya Citra

Very weak diversification

The 3 months correlation between Sawit and Surya is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sawit Sumbermas Sarana and Surya Citra Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Citra Media and Sawit Sumbermas 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 Sawit Sumbermas Sarana are associated (or correlated) with Surya Citra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Citra Media has no effect on the direction of Sawit Sumbermas i.e., Sawit Sumbermas and Surya Citra go up and down completely randomly.

Pair Corralation between Sawit Sumbermas and Surya Citra

Assuming the 90 days trading horizon Sawit Sumbermas is expected to generate 9.74 times less return on investment than Surya Citra. In addition to that, Sawit Sumbermas is 1.03 times more volatile than Surya Citra Media. It trades about 0.01 of its total potential returns per unit of risk. Surya Citra Media is currently generating about 0.07 per unit of volatility. If you would invest  11,812  in Surya Citra Media on August 31, 2024 and sell it today you would earn a total of  1,088  from holding Surya Citra Media or generate 9.21% return on investment over 90 days.

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

Sawit Sumbermas Sarana  vs.  Surya Citra Media

Sawit Sumbermas Sarana

Risk-Adjusted Performance

0 of 100

Very Weak

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

Surya Citra Media

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Surya Citra Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Surya Citra may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Sawit Sumbermas and Surya Citra

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

The idea behind Sawit Sumbermas Sarana and Surya Citra Media 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.