Correlation Between Trias Sentosa and Trimegah Securities

Can any of the company-specific risk be diversified away by investing in both Trias Sentosa and Trimegah Securities 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 Trimegah Securities 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 Trimegah Securities Tbk, you can compare the effects of market volatilities on Trias Sentosa and Trimegah Securities 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 Trimegah Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trias Sentosa and Trimegah Securities.

Diversification Opportunities for Trias Sentosa and Trimegah Securities

0.31

Correlation Coefficient

Trias Sentosa  Trimegah Securities

Weak diversification

The 3 months correlation between Trias and Trimegah is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa Tbk and Trimegah Securities Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Securities Tbk 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 Trimegah Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Securities Tbk has no effect on the direction of Trias Sentosa i.e., Trias Sentosa and Trimegah Securities go up and down completely randomly.

Pair Corralation between Trias Sentosa and Trimegah Securities

Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to under-perform the Trimegah Securities. But the stock apears to be less risky and, when comparing its historical volatility, Trias Sentosa Tbk is 2.7 times less risky than Trimegah Securities. The stock trades about -0.24 of its potential returns per unit of risk. The Trimegah Securities Tbk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  36,000  in Trimegah Securities Tbk on December 31, 2024 and sell it today you would earn a total of  2,000  from holding Trimegah Securities Tbk or generate 5.56% return on investment over 90 days.

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

Trias Sentosa Tbk  vs.  Trimegah Securities Tbk

Trias Sentosa Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trias Sentosa Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Trimegah Securities Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trimegah Securities Tbk are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Trimegah Securities may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Trias Sentosa and Trimegah Securities

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

The idea behind Trias Sentosa Tbk and Trimegah Securities Tbk 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.