Correlation Between Samindo Resources and PT Saraswanti

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

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

Diversification Opportunities for Samindo Resources and PT Saraswanti

-0.84

Correlation Coefficient

Samindo Resources  PT Saraswanti

Pay attention - limited upside

The 3 months correlation between Samindo and SWID is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Samindo Resources Tbk and PT Saraswanti Indoland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Saraswanti Indoland and Samindo Resources 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 Samindo Resources Tbk are associated (or correlated) with PT Saraswanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Saraswanti Indoland has no effect on the direction of Samindo Resources i.e., Samindo Resources and PT Saraswanti go up and down completely randomly.

Pair Corralation between Samindo Resources and PT Saraswanti

Assuming the 90 days trading horizon Samindo Resources Tbk is expected to generate 0.76 times more return on investment than PT Saraswanti. However, Samindo Resources Tbk is 1.31 times less risky than PT Saraswanti. It trades about 0.02 of its potential returns per unit of risk. PT Saraswanti Indoland is currently generating about -0.03 per unit of risk. If you would invest  151,446  in Samindo Resources Tbk on September 26, 2024 and sell it today you would earn a total of  21,554  from holding Samindo Resources Tbk or generate 14.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Samindo Resources Tbk  vs.  PT Saraswanti Indoland

Samindo Resources Tbk

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samindo Resources Tbk are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Samindo Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Saraswanti Indoland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Saraswanti Indoland 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Samindo Resources and PT Saraswanti

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

The idea behind Samindo Resources Tbk and PT Saraswanti Indoland 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.