Correlation Between Surya Citra and Millennium Pharmacon

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

By analyzing existing cross correlation between Surya Citra Media and Millennium Pharmacon International, you can compare the effects of market volatilities on Surya Citra and Millennium Pharmacon 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 Surya Citra with a short position of Millennium Pharmacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Citra and Millennium Pharmacon.

Diversification Opportunities for Surya Citra and Millennium Pharmacon

-0.06

Correlation Coefficient

Surya Citra  Millennium Pharmacon

Good diversification

The 3 months correlation between Surya and Millennium is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Surya Citra Media and Millennium Pharmacon Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Pharmacon and Surya Citra 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 Surya Citra Media are associated (or correlated) with Millennium Pharmacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Pharmacon has no effect on the direction of Surya Citra i.e., Surya Citra and Millennium Pharmacon go up and down completely randomly.

Pair Corralation between Surya Citra and Millennium Pharmacon

Assuming the 90 days trading horizon Surya Citra Media is expected to generate 1.06 times more return on investment than Millennium Pharmacon. However, Surya Citra is 1.06 times more volatile than Millennium Pharmacon International. It trades about 0.2 of its potential returns per unit of risk. Millennium Pharmacon International is currently generating about 0.02 per unit of risk. If you would invest  11,524  in Surya Citra Media on September 12, 2024 and sell it today you would earn a total of  6,376  from holding Surya Citra Media or generate 55.33% return on investment over 90 days.

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

Surya Citra Media  vs.  Millennium Pharmacon Internati

Surya Citra Media

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Surya Citra Media are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Surya Citra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Millennium Pharmacon

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Millennium Pharmacon International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Millennium Pharmacon 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 Surya Citra and Millennium Pharmacon

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

The idea behind Surya Citra Media and Millennium Pharmacon International 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.