Correlation Between Suryamas Dutamakmur and Wulandari Bangun

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

By analyzing existing cross correlation between Suryamas Dutamakmur Tbk and Wulandari Bangun Laksana, you can compare the effects of market volatilities on Suryamas Dutamakmur and Wulandari Bangun 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 Suryamas Dutamakmur with a short position of Wulandari Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suryamas Dutamakmur and Wulandari Bangun.

Diversification Opportunities for Suryamas Dutamakmur and Wulandari Bangun

-0.74

Correlation Coefficient

Suryamas Dutamakmur  Wulandari Bangun

Pay attention - limited upside

The 3 months correlation between Suryamas and Wulandari is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Suryamas Dutamakmur Tbk and Wulandari Bangun Laksana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wulandari Bangun Laksana and Suryamas Dutamakmur 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 Suryamas Dutamakmur Tbk are associated (or correlated) with Wulandari Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wulandari Bangun Laksana has no effect on the direction of Suryamas Dutamakmur i.e., Suryamas Dutamakmur and Wulandari Bangun go up and down completely randomly.

Pair Corralation between Suryamas Dutamakmur and Wulandari Bangun

Assuming the 90 days trading horizon Suryamas Dutamakmur Tbk is expected to generate 0.32 times more return on investment than Wulandari Bangun. However, Suryamas Dutamakmur Tbk is 3.09 times less risky than Wulandari Bangun. It trades about 0.14 of its potential returns per unit of risk. Wulandari Bangun Laksana is currently generating about -0.15 per unit of risk. If you would invest  49,400  in Suryamas Dutamakmur Tbk on October 1, 2024 and sell it today you would earn a total of  3,100  from holding Suryamas Dutamakmur Tbk or generate 6.28% return on investment over 90 days.

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

Suryamas Dutamakmur Tbk  vs.  Wulandari Bangun Laksana

Suryamas Dutamakmur Tbk

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Suryamas Dutamakmur Tbk are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Suryamas Dutamakmur may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wulandari Bangun Laksana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wulandari Bangun Laksana 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 Suryamas Dutamakmur and Wulandari Bangun

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

The idea behind Suryamas Dutamakmur Tbk and Wulandari Bangun Laksana 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.