Correlation Between Trias Sentosa and Sriwahana

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

By analyzing existing cross correlation between Trias Sentosa Tbk and Sriwahana, you can compare the effects of market volatilities on Trias Sentosa and Sriwahana 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 Trias Sentosa with a short position of Sriwahana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trias Sentosa and Sriwahana.

Diversification Opportunities for Trias Sentosa and Sriwahana

-0.28

Correlation Coefficient

Trias Sentosa  Sriwahana

Very good diversification

The 3 months correlation between Trias and Sriwahana is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa Tbk and Sriwahana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sriwahana and Trias Sentosa 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 Trias Sentosa Tbk are associated (or correlated) with Sriwahana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sriwahana has no effect on the direction of Trias Sentosa i.e., Trias Sentosa and Sriwahana go up and down completely randomly.

Pair Corralation between Trias Sentosa and Sriwahana

Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to generate 0.56 times more return on investment than Sriwahana. However, Trias Sentosa Tbk is 1.79 times less risky than Sriwahana. It trades about 0.02 of its potential returns per unit of risk. Sriwahana is currently generating about 0.01 per unit of risk. If you would invest  49,400  in Trias Sentosa Tbk on December 22, 2024 and sell it today you would earn a total of  600.00  from holding Trias Sentosa Tbk or generate 1.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Trias Sentosa Tbk  vs.  Sriwahana

Trias Sentosa Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trias Sentosa Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Trias Sentosa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Sriwahana

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Trias Sentosa Tbk and Sriwahana 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.