Correlation Between Sunson Textile and Ricky Putra

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

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

Diversification Opportunities for Sunson Textile and Ricky Putra

0.25

Correlation Coefficient

Sunson Textile  Ricky Putra

Modest diversification

The 3 months correlation between Sunson and Ricky is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sunson Textile Manufacturer and Ricky Putra Globalindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ricky Putra Globalindo and Sunson Textile 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 Sunson Textile Manufacturer are associated (or correlated) with Ricky Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ricky Putra Globalindo has no effect on the direction of Sunson Textile i.e., Sunson Textile and Ricky Putra go up and down completely randomly.

Pair Corralation between Sunson Textile and Ricky Putra

Assuming the 90 days trading horizon Sunson Textile Manufacturer is expected to under-perform the Ricky Putra. In addition to that, Sunson Textile is 1.72 times more volatile than Ricky Putra Globalindo. It trades about -0.12 of its total potential returns per unit of risk. Ricky Putra Globalindo is currently generating about -0.07 per unit of volatility. If you would invest  8,500  in Ricky Putra Globalindo on September 4, 2024 and sell it today you would lose (1,000.00) from holding Ricky Putra Globalindo or give up 11.76% of portfolio value over 90 days.

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

Sunson Textile Manufacturer  vs.  Ricky Putra Globalindo

Sunson Textile Manuf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunson Textile Manufacturer 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.

Ricky Putra Globalindo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ricky Putra Globalindo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Sunson Textile and Ricky Putra

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

The idea behind Sunson Textile Manufacturer and Ricky Putra Globalindo 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.