Correlation Between Siloam International and Supra Boga

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

By analyzing existing cross correlation between Siloam International Hospitals and Supra Boga Lestari, you can compare the effects of market volatilities on Siloam International and Supra Boga 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 Siloam International with a short position of Supra Boga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siloam International and Supra Boga.

Diversification Opportunities for Siloam International and Supra Boga

-0.01

Correlation Coefficient

Siloam International  Supra Boga

Good diversification

The 3 months correlation between Siloam and Supra is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Siloam International Hospitals and Supra Boga Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supra Boga Lestari and Siloam International 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 Siloam International Hospitals are associated (or correlated) with Supra Boga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supra Boga Lestari has no effect on the direction of Siloam International i.e., Siloam International and Supra Boga go up and down completely randomly.

Pair Corralation between Siloam International and Supra Boga

Assuming the 90 days trading horizon Siloam International Hospitals is expected to generate 1.47 times more return on investment than Supra Boga. However, Siloam International is 1.47 times more volatile than Supra Boga Lestari. It trades about 0.11 of its potential returns per unit of risk. Supra Boga Lestari is currently generating about 0.03 per unit of risk. If you would invest  300,000  in Siloam International Hospitals on September 17, 2024 and sell it today you would earn a total of  9,000  from holding Siloam International Hospitals or generate 3.0% return on investment over 90 days.

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

Siloam International Hospitals  vs.  Supra Boga Lestari

Siloam International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siloam International Hospitals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Siloam International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Supra Boga Lestari

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Supra Boga 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 Siloam International and Supra Boga

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

The idea behind Siloam International Hospitals and Supra Boga 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.