Correlation Between PT Temas and Suparma Tbk
Can any of the company-specific risk be diversified away by investing in both PT Temas and Suparma 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 PT Temas and Suparma Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Temas Tbk and Suparma Tbk, you can compare the effects of market volatilities on PT Temas and Suparma 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 PT Temas with a short position of Suparma Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Temas and Suparma Tbk.
Diversification Opportunities for PT Temas and Suparma Tbk
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TMAS and Suparma is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PT Temas Tbk and Suparma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suparma Tbk and PT Temas 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 Temas Tbk are associated (or correlated) with Suparma Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suparma Tbk has no effect on the direction of PT Temas i.e., PT Temas and Suparma Tbk go up and down completely randomly.
Pair Corralation between PT Temas and Suparma Tbk
Assuming the 90 days trading horizon PT Temas Tbk is expected to generate 1.49 times more return on investment than Suparma Tbk. However, PT Temas is 1.49 times more volatile than Suparma Tbk. It trades about -0.05 of its potential returns per unit of risk. Suparma Tbk is currently generating about -0.08 per unit of risk. If you would invest 13,800 in PT Temas Tbk on December 29, 2024 and sell it today you would lose (1,100) from holding PT Temas Tbk or give up 7.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PT Temas Tbk vs. Suparma Tbk
Performance |
Timeline |
PT Temas Tbk |
Suparma Tbk |
PT Temas and Suparma Tbk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Temas and Suparma Tbk
The main advantage of trading using opposite PT Temas and Suparma Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Temas position performs unexpectedly, Suparma 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 Suparma Tbk will offset losses from the drop in Suparma Tbk's long position.PT Temas vs. Samudera Indonesia Tbk | PT Temas vs. Weha Transportasi Indonesia | PT Temas vs. Rig Tenders Tbk | PT Temas vs. Lautan Luas Tbk |
Suparma Tbk vs. Trias Sentosa Tbk | Suparma Tbk vs. Slj Global Tbk | Suparma Tbk vs. PT Sreeya Sewu | Suparma Tbk vs. Indo Acidatama Tbk |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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