Correlation Between Suryamas Dutamakmur and Natura City
Can any of the company-specific risk be diversified away by investing in both Suryamas Dutamakmur and Natura City 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 Natura City 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 Natura City Developments, you can compare the effects of market volatilities on Suryamas Dutamakmur and Natura City 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 Natura City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suryamas Dutamakmur and Natura City.
Diversification Opportunities for Suryamas Dutamakmur and Natura City
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suryamas and Natura is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Suryamas Dutamakmur Tbk and Natura City Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natura City Developments 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 Natura City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natura City Developments has no effect on the direction of Suryamas Dutamakmur i.e., Suryamas Dutamakmur and Natura City go up and down completely randomly.
Pair Corralation between Suryamas Dutamakmur and Natura City
Assuming the 90 days trading horizon Suryamas Dutamakmur is expected to generate 10.34 times less return on investment than Natura City. But when comparing it to its historical volatility, Suryamas Dutamakmur Tbk is 12.92 times less risky than Natura City. It trades about 0.13 of its potential returns per unit of risk. Natura City Developments is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,600 in Natura City Developments on September 26, 2024 and sell it today you would earn a total of 3,200 from holding Natura City Developments or generate 42.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
Suryamas Dutamakmur Tbk vs. Natura City Developments
Performance |
Timeline |
Suryamas Dutamakmur Tbk |
Natura City Developments |
Suryamas Dutamakmur and Natura City Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Suryamas Dutamakmur and Natura City
The main advantage of trading using opposite Suryamas Dutamakmur and Natura City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suryamas Dutamakmur position performs unexpectedly, Natura City 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 Natura City will offset losses from the drop in Natura City's long position.Suryamas Dutamakmur vs. Modernland Realty Ltd | Suryamas Dutamakmur vs. Jakarta Int Hotels | Suryamas Dutamakmur vs. Intiland Development Tbk |
Natura City vs. Modernland Realty Ltd | Natura City vs. Jakarta Int Hotels | Natura City vs. Intiland Development Tbk |
Check out your portfolio center.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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