Correlation Between PT Hatten and Sanurhasta Mitra

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

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

Diversification Opportunities for PT Hatten and Sanurhasta Mitra

-0.54

Correlation Coefficient

PT Hatten  Sanurhasta Mitra

Excellent diversification

The 3 months correlation between WINE and Sanurhasta is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding PT Hatten Bali and Sanurhasta Mitra PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanurhasta Mitra and PT Hatten 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 PT Hatten Bali are associated (or correlated) with Sanurhasta Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanurhasta Mitra has no effect on the direction of PT Hatten i.e., PT Hatten and Sanurhasta Mitra go up and down completely randomly.

Pair Corralation between PT Hatten and Sanurhasta Mitra

Assuming the 90 days trading horizon PT Hatten Bali is expected to under-perform the Sanurhasta Mitra. But the stock apears to be less risky and, when comparing its historical volatility, PT Hatten Bali is 2.48 times less risky than Sanurhasta Mitra. The stock trades about -0.05 of its potential returns per unit of risk. The Sanurhasta Mitra PT is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  5,500  in Sanurhasta Mitra PT on December 22, 2024 and sell it today you would earn a total of  9,300  from holding Sanurhasta Mitra PT or generate 169.09% return on investment over 90 days.

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

PT Hatten Bali  vs.  Sanurhasta Mitra PT

PT Hatten Bali

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Hatten Bali 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.

Sanurhasta Mitra

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sanurhasta Mitra PT are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sanurhasta Mitra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Hatten and Sanurhasta Mitra

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

The idea behind PT Hatten Bali and Sanurhasta Mitra PT 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.