Correlation Between Integra Indocabinet and Sariguna Primatirta

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

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

Diversification Opportunities for Integra Indocabinet and Sariguna Primatirta

0.39

Correlation Coefficient

Integra Indocabinet  Sariguna Primatirta

Weak diversification

The 3 months correlation between Integra and Sariguna is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Sariguna Primatirta PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sariguna Primatirta and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with Sariguna Primatirta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sariguna Primatirta has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Sariguna Primatirta go up and down completely randomly.

Pair Corralation between Integra Indocabinet and Sariguna Primatirta

Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to under-perform the Sariguna Primatirta. But the stock apears to be less risky and, when comparing its historical volatility, Integra Indocabinet Tbk is 1.33 times less risky than Sariguna Primatirta. The stock trades about -0.26 of its potential returns per unit of risk. The Sariguna Primatirta PT is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  150,000  in Sariguna Primatirta PT on December 1, 2024 and sell it today you would lose (12,000) from holding Sariguna Primatirta PT or give up 8.0% of portfolio value over 90 days.

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

Integra Indocabinet Tbk  vs.  Sariguna Primatirta PT

Integra Indocabinet Tbk

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Indocabinet Tbk are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Integra Indocabinet disclosed solid returns over the last few months and may actually be approaching a breakup point.

Sariguna Primatirta

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sariguna Primatirta PT are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sariguna Primatirta disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integra Indocabinet and Sariguna Primatirta

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

The idea behind Integra Indocabinet Tbk and Sariguna Primatirta 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.