Correlation Between Surya Toto and Kmi Wire

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

By analyzing existing cross correlation between Surya Toto Indonesia and Kmi Wire And, you can compare the effects of market volatilities on Surya Toto and Kmi Wire 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 Surya Toto with a short position of Kmi Wire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Toto and Kmi Wire.

Diversification Opportunities for Surya Toto and Kmi Wire

0.45

Correlation Coefficient

Surya Toto  Kmi Wire

Very weak diversification

The 3 months correlation between Surya and Kmi is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Surya Toto Indonesia and Kmi Wire And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kmi Wire And and Surya Toto 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 Surya Toto Indonesia are associated (or correlated) with Kmi Wire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kmi Wire And has no effect on the direction of Surya Toto i.e., Surya Toto and Kmi Wire go up and down completely randomly.

Pair Corralation between Surya Toto and Kmi Wire

Assuming the 90 days trading horizon Surya Toto Indonesia is expected to under-perform the Kmi Wire. But the stock apears to be less risky and, when comparing its historical volatility, Surya Toto Indonesia is 1.38 times less risky than Kmi Wire. The stock trades about -0.06 of its potential returns per unit of risk. The Kmi Wire And is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  37,000  in Kmi Wire And on December 26, 2024 and sell it today you would earn a total of  1,000.00  from holding Kmi Wire And or generate 2.7% return on investment over 90 days.

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

Surya Toto Indonesia  vs.  Kmi Wire And

Surya Toto Indonesia

Risk-Adjusted Performance

Very Weak

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

Kmi Wire And

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kmi Wire And are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Kmi Wire 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 Surya Toto and Kmi Wire

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

The idea behind Surya Toto Indonesia and Kmi Wire And 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .