Correlation Between Visa and Sejahtera Bintang

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

By analyzing existing cross correlation between Visa Class A and Sejahtera Bintang Abadi, you can compare the effects of market volatilities on Visa and Sejahtera Bintang 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 Visa with a short position of Sejahtera Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Sejahtera Bintang.

Diversification Opportunities for Visa and Sejahtera Bintang

0.0

Correlation Coefficient

Visa  Sejahtera Bintang

Pay attention - limited upside

The 3 months correlation between Visa and Sejahtera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Sejahtera Bintang Abadi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejahtera Bintang Abadi and Visa 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 Visa Class A are associated (or correlated) with Sejahtera Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejahtera Bintang Abadi has no effect on the direction of Visa i.e., Visa and Sejahtera Bintang go up and down completely randomly.

Pair Corralation between Visa and Sejahtera Bintang

Taking into account the 90-day investment horizon Visa is expected to generate 6.23 times less return on investment than Sejahtera Bintang. But when comparing it to its historical volatility, Visa Class A is 17.57 times less risky than Sejahtera Bintang. It trades about 0.07 of its potential returns per unit of risk. Sejahtera Bintang Abadi is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5,000  in Sejahtera Bintang Abadi on October 11, 2024 and sell it today you would lose (4,900) from holding Sejahtera Bintang Abadi or give up 98.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.55%
Values	Daily Returns

Visa Class A  vs.  Sejahtera Bintang Abadi

Visa Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Sejahtera Bintang Abadi

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Visa Class A and Sejahtera Bintang Abadi 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.