Correlation Between PT Sarana and SITO Mobile

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

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

Diversification Opportunities for PT Sarana and SITO Mobile

0.29

Correlation Coefficient

PT Sarana  SITO Mobile

Modest diversification

The 3 months correlation between SMNUF and SITO is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PT Sarana Menara and SITO Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITO Mobile and PT Sarana 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 Sarana Menara are associated (or correlated) with SITO Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITO Mobile has no effect on the direction of PT Sarana i.e., PT Sarana and SITO Mobile go up and down completely randomly.

Pair Corralation between PT Sarana and SITO Mobile

If you would invest  0.21  in SITO Mobile on September 5, 2024 and sell it today you would earn a total of  0.00  from holding SITO Mobile or generate 0.0% return on investment over 90 days.

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

PT Sarana Menara  vs.  SITO Mobile

PT Sarana Menara

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Sarana Menara has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PT Sarana is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SITO Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SITO Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, SITO Mobile is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PT Sarana and SITO Mobile

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

The idea behind PT Sarana Menara and SITO Mobile 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.