Correlation Between Berlina Tbk and Satyamitra Kemas

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

By analyzing existing cross correlation between Berlina Tbk and Satyamitra Kemas Lestari, you can compare the effects of market volatilities on Berlina Tbk and Satyamitra Kemas 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 Berlina Tbk with a short position of Satyamitra Kemas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berlina Tbk and Satyamitra Kemas.

Diversification Opportunities for Berlina Tbk and Satyamitra Kemas

-0.5

Correlation Coefficient

Berlina Tbk  Satyamitra Kemas

Very good diversification

The 3 months correlation between Berlina and Satyamitra is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Berlina Tbk and Satyamitra Kemas Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satyamitra Kemas Lestari and Berlina Tbk 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 Berlina Tbk are associated (or correlated) with Satyamitra Kemas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satyamitra Kemas Lestari has no effect on the direction of Berlina Tbk i.e., Berlina Tbk and Satyamitra Kemas go up and down completely randomly.

Pair Corralation between Berlina Tbk and Satyamitra Kemas

Assuming the 90 days trading horizon Berlina Tbk is expected to generate 2.73 times more return on investment than Satyamitra Kemas. However, Berlina Tbk is 2.73 times more volatile than Satyamitra Kemas Lestari. It trades about 0.02 of its potential returns per unit of risk. Satyamitra Kemas Lestari is currently generating about -0.14 per unit of risk. If you would invest  70,000  in Berlina Tbk on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Berlina Tbk or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Berlina Tbk  vs.  Satyamitra Kemas Lestari

Berlina Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Berlina Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Berlina Tbk is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Satyamitra Kemas Lestari

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Satyamitra Kemas Lestari has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Berlina Tbk and Satyamitra Kemas

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

The idea behind Berlina Tbk and Satyamitra Kemas Lestari 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.