Correlation Between Triputra Agro and Sawit Sumbermas
Can any of the company-specific risk be diversified away by investing in both Triputra Agro and Sawit Sumbermas 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 Triputra Agro and Sawit Sumbermas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triputra Agro Persada and Sawit Sumbermas Sarana, you can compare the effects of market volatilities on Triputra Agro and Sawit Sumbermas 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 Triputra Agro with a short position of Sawit Sumbermas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triputra Agro and Sawit Sumbermas.
Diversification Opportunities for Triputra Agro and Sawit Sumbermas
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Triputra and Sawit is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Triputra Agro Persada and Sawit Sumbermas Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sawit Sumbermas Sarana and Triputra Agro 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 Triputra Agro Persada are associated (or correlated) with Sawit Sumbermas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sawit Sumbermas Sarana has no effect on the direction of Triputra Agro i.e., Triputra Agro and Sawit Sumbermas go up and down completely randomly.
Pair Corralation between Triputra Agro and Sawit Sumbermas
Assuming the 90 days trading horizon Triputra Agro is expected to generate 205.63 times less return on investment than Sawit Sumbermas. But when comparing it to its historical volatility, Triputra Agro Persada is 2.92 times less risky than Sawit Sumbermas. It trades about 0.0 of its potential returns per unit of risk. Sawit Sumbermas Sarana is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 104,500 in Sawit Sumbermas Sarana on December 5, 2024 and sell it today you would earn a total of 49,500 from holding Sawit Sumbermas Sarana or generate 47.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Triputra Agro Persada vs. Sawit Sumbermas Sarana
Performance |
Timeline |
Triputra Agro Persada |
Sawit Sumbermas Sarana |
Triputra Agro and Sawit Sumbermas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Triputra Agro and Sawit Sumbermas
The main advantage of trading using opposite Triputra Agro and Sawit Sumbermas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triputra Agro position performs unexpectedly, Sawit Sumbermas 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 Sawit Sumbermas will offset losses from the drop in Sawit Sumbermas' long position.Triputra Agro vs. Dharma Satya Nusantara | Triputra Agro vs. Saratoga Investama Sedaya | Triputra Agro vs. Surya Esa Perkasa | Triputra Agro vs. Elang Mahkota Teknologi |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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