Correlation Between PT Sari and Avia Avian

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

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

Diversification Opportunities for PT Sari and Avia Avian

-0.7

Correlation Coefficient

PT Sari  Avia Avian

Excellent diversification

The 3 months correlation between RAFI and Avia is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding PT Sari Kreasi and Avia Avian PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avia Avian PT and PT Sari 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 Sari Kreasi are associated (or correlated) with Avia Avian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avia Avian PT has no effect on the direction of PT Sari i.e., PT Sari and Avia Avian go up and down completely randomly.

Pair Corralation between PT Sari and Avia Avian

Assuming the 90 days trading horizon PT Sari Kreasi is expected to generate 2.71 times more return on investment than Avia Avian. However, PT Sari is 2.71 times more volatile than Avia Avian PT. It trades about 0.14 of its potential returns per unit of risk. Avia Avian PT is currently generating about -0.24 per unit of risk. If you would invest  2,500  in PT Sari Kreasi on September 27, 2024 and sell it today you would earn a total of  1,000.00  from holding PT Sari Kreasi or generate 40.0% return on investment over 90 days.

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

PT Sari Kreasi  vs.  Avia Avian PT

PT Sari Kreasi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PT Sari Kreasi are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Sari disclosed solid returns over the last few months and may actually be approaching a breakup point.

Avia Avian PT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avia Avian PT 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 PT Sari and Avia Avian

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

The idea behind PT Sari Kreasi and Avia Avian 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.