Correlation Between PT Semen and Tecsys

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

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

Diversification Opportunities for PT Semen and Tecsys

-0.52

Correlation Coefficient

PT Semen  Tecsys

Excellent diversification

The 3 months correlation between PSGTF and Tecsys is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PT Semen Indonesia and Tecsys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecsys Inc and PT Semen 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 Semen Indonesia are associated (or correlated) with Tecsys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecsys Inc has no effect on the direction of PT Semen i.e., PT Semen and Tecsys go up and down completely randomly.

Pair Corralation between PT Semen and Tecsys

Assuming the 90 days horizon PT Semen Indonesia is expected to under-perform the Tecsys. In addition to that, PT Semen is 3.99 times more volatile than Tecsys Inc. It trades about -0.16 of its total potential returns per unit of risk. Tecsys Inc is currently generating about 0.21 per unit of volatility. If you would invest  2,902  in Tecsys Inc on September 22, 2024 and sell it today you would earn a total of  426.00  from holding Tecsys Inc or generate 14.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

PT Semen Indonesia  vs.  Tecsys Inc

PT Semen Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Semen Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Tecsys Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tecsys Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Tecsys reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Semen and Tecsys

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

The idea behind PT Semen Indonesia and Tecsys Inc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.