Correlation Between Ulima Nitra and PT Sunter

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

By analyzing existing cross correlation between Ulima Nitra PT and PT Sunter Lakeside, you can compare the effects of market volatilities on Ulima Nitra and PT Sunter 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 Ulima Nitra with a short position of PT Sunter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ulima Nitra and PT Sunter.

Diversification Opportunities for Ulima Nitra and PT Sunter

0.68

Correlation Coefficient

Ulima Nitra  PT Sunter

Poor diversification

The 3 months correlation between Ulima and SNLK is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ulima Nitra PT and PT Sunter Lakeside in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sunter Lakeside and Ulima Nitra 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 Ulima Nitra PT are associated (or correlated) with PT Sunter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sunter Lakeside has no effect on the direction of Ulima Nitra i.e., Ulima Nitra and PT Sunter go up and down completely randomly.

Pair Corralation between Ulima Nitra and PT Sunter

Assuming the 90 days trading horizon Ulima Nitra PT is expected to generate 0.68 times more return on investment than PT Sunter. However, Ulima Nitra PT is 1.47 times less risky than PT Sunter. It trades about 0.17 of its potential returns per unit of risk. PT Sunter Lakeside is currently generating about -0.06 per unit of risk. If you would invest  43,800  in Ulima Nitra PT on December 29, 2024 and sell it today you would earn a total of  12,200  from holding Ulima Nitra PT or generate 27.85% return on investment over 90 days.

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

Ulima Nitra PT  vs.  PT Sunter Lakeside

Ulima Nitra PT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ulima Nitra PT are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Ulima Nitra disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Sunter Lakeside

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Sunter Lakeside 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Ulima Nitra and PT Sunter

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

The idea behind Ulima Nitra PT and PT Sunter Lakeside 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 Transaction History module to view history of all your transactions and understand their impact on performance.