Correlation Between Surya Semesta and Sentul City

Can any of the company-specific risk be diversified away by investing in both Surya Semesta and Sentul 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 Surya Semesta and Sentul City into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Surya Semesta Internusa and Sentul City Tbk, you can compare the effects of market volatilities on Surya Semesta and Sentul 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 Surya Semesta with a short position of Sentul City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Semesta and Sentul City.

Diversification Opportunities for Surya Semesta and Sentul City

-0.28

Correlation Coefficient

Surya Semesta  Sentul City

Very good diversification

The 3 months correlation between Surya and Sentul is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Surya Semesta Internusa and Sentul City Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentul City Tbk and Surya Semesta 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 Surya Semesta Internusa are associated (or correlated) with Sentul City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentul City Tbk has no effect on the direction of Surya Semesta i.e., Surya Semesta and Sentul City go up and down completely randomly.

Pair Corralation between Surya Semesta and Sentul City

Assuming the 90 days trading horizon Surya Semesta Internusa is expected to generate 1.35 times more return on investment than Sentul City. However, Surya Semesta is 1.35 times more volatile than Sentul City Tbk. It trades about 0.1 of its potential returns per unit of risk. Sentul City Tbk is currently generating about 0.04 per unit of risk. If you would invest  27,105  in Surya Semesta Internusa on September 13, 2024 and sell it today you would earn a total of  80,895  from holding Surya Semesta Internusa or generate 298.45% return on investment over 90 days.

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

Surya Semesta Internusa  vs.  Sentul City Tbk

Surya Semesta Internusa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surya Semesta Internusa 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.

Sentul City Tbk

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sentul City Tbk are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sentul City disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Surya Semesta and Sentul City

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

The idea behind Surya Semesta Internusa and Sentul City Tbk 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.