Correlation Between Sumber Alfaria and Sejahteraraya Anugrahjaya

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

By analyzing existing cross correlation between Sumber Alfaria Trijaya and Sejahteraraya Anugrahjaya Tbk, you can compare the effects of market volatilities on Sumber Alfaria and Sejahteraraya Anugrahjaya 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 Sumber Alfaria with a short position of Sejahteraraya Anugrahjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Sejahteraraya Anugrahjaya.

Diversification Opportunities for Sumber Alfaria and Sejahteraraya Anugrahjaya

0.18

Correlation Coefficient

Sumber Alfaria  Sejahteraraya Anugrahjaya

Average diversification

The 3 months correlation between Sumber and Sejahteraraya is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Sejahteraraya Anugrahjaya Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejahteraraya Anugrahjaya and Sumber Alfaria 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 Sumber Alfaria Trijaya are associated (or correlated) with Sejahteraraya Anugrahjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejahteraraya Anugrahjaya has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Sejahteraraya Anugrahjaya go up and down completely randomly.

Pair Corralation between Sumber Alfaria and Sejahteraraya Anugrahjaya

Assuming the 90 days trading horizon Sumber Alfaria Trijaya is expected to under-perform the Sejahteraraya Anugrahjaya. In addition to that, Sumber Alfaria is 1.09 times more volatile than Sejahteraraya Anugrahjaya Tbk. It trades about -0.04 of its total potential returns per unit of risk. Sejahteraraya Anugrahjaya Tbk is currently generating about -0.03 per unit of volatility. If you would invest  256,000  in Sejahteraraya Anugrahjaya Tbk on September 16, 2024 and sell it today you would lose (13,000) from holding Sejahteraraya Anugrahjaya Tbk or give up 5.08% of portfolio value over 90 days.

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

Sumber Alfaria Trijaya  vs.  Sejahteraraya Anugrahjaya Tbk

Sumber Alfaria Trijaya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sumber Alfaria Trijaya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sumber Alfaria is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Sejahteraraya Anugrahjaya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sejahteraraya Anugrahjaya Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sejahteraraya Anugrahjaya 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 Sumber Alfaria and Sejahteraraya Anugrahjaya

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

The idea behind Sumber Alfaria Trijaya and Sejahteraraya Anugrahjaya 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.