Correlation Between Sejahteraraya Anugrahjaya and Sunson Textile

Can any of the company-specific risk be diversified away by investing in both Sejahteraraya Anugrahjaya and Sunson Textile 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 Sejahteraraya Anugrahjaya and Sunson Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sejahteraraya Anugrahjaya Tbk and Sunson Textile Manufacturer, you can compare the effects of market volatilities on Sejahteraraya Anugrahjaya and Sunson Textile 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 Sejahteraraya Anugrahjaya with a short position of Sunson Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejahteraraya Anugrahjaya and Sunson Textile.

Diversification Opportunities for Sejahteraraya Anugrahjaya and Sunson Textile

-0.39

Correlation Coefficient

Sejahteraraya Anugrahjaya  Sunson Textile

Very good diversification

The 3 months correlation between Sejahteraraya and Sunson is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sejahteraraya Anugrahjaya Tbk and Sunson Textile Manufacturer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunson Textile Manuf and Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya Tbk are associated (or correlated) with Sunson Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunson Textile Manuf has no effect on the direction of Sejahteraraya Anugrahjaya i.e., Sejahteraraya Anugrahjaya and Sunson Textile go up and down completely randomly.

Pair Corralation between Sejahteraraya Anugrahjaya and Sunson Textile

Assuming the 90 days trading horizon Sejahteraraya Anugrahjaya Tbk is expected to under-perform the Sunson Textile. But the stock apears to be less risky and, when comparing its historical volatility, Sejahteraraya Anugrahjaya Tbk is 8.86 times less risky than Sunson Textile. The stock trades about -0.88 of its potential returns per unit of risk. The Sunson Textile Manufacturer is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  19,100  in Sunson Textile Manufacturer on September 17, 2024 and sell it today you would earn a total of  16,300  from holding Sunson Textile Manufacturer or generate 85.34% return on investment over 90 days.

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

Sejahteraraya Anugrahjaya Tbk  vs.  Sunson Textile Manufacturer

Sejahteraraya Anugrahjaya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sejahteraraya Anugrahjaya Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sejahteraraya Anugrahjaya is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Sunson Textile Manuf

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sunson Textile Manufacturer are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sunson Textile disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sejahteraraya Anugrahjaya and Sunson Textile

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

The idea behind Sejahteraraya Anugrahjaya Tbk and Sunson Textile Manufacturer 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.