Correlation Between PT Saraswanti and PT Winner

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

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

Diversification Opportunities for PT Saraswanti and PT Winner

0.77

Correlation Coefficient

PT Saraswanti  PT Winner

Poor diversification

The 3 months correlation between SWID and WINR is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding PT Saraswanti Indoland and PT Winner Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Winner Nusantara and PT Saraswanti 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 Saraswanti Indoland are associated (or correlated) with PT Winner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Winner Nusantara has no effect on the direction of PT Saraswanti i.e., PT Saraswanti and PT Winner go up and down completely randomly.

Pair Corralation between PT Saraswanti and PT Winner

Assuming the 90 days trading horizon PT Saraswanti Indoland is expected to generate 0.61 times more return on investment than PT Winner. However, PT Saraswanti Indoland is 1.64 times less risky than PT Winner. It trades about -0.02 of its potential returns per unit of risk. PT Winner Nusantara is currently generating about -0.05 per unit of risk. If you would invest  9,138  in PT Saraswanti Indoland on October 10, 2024 and sell it today you would lose (2,338) from holding PT Saraswanti Indoland or give up 25.59% of portfolio value over 90 days.

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

PT Saraswanti Indoland  vs.  PT Winner Nusantara

PT Saraswanti Indoland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Saraswanti Indoland 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.

PT Winner Nusantara

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Winner Nusantara has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Winner 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 Saraswanti and PT Winner

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

The idea behind PT Saraswanti Indoland and PT Winner Nusantara 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.