Correlation Between PT Saraswanti and Natura City
Can any of the company-specific risk be diversified away by investing in both PT Saraswanti 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 PT Saraswanti and Natura City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Saraswanti Indoland and Natura City Developments, you can compare the effects of market volatilities on PT Saraswanti 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 PT Saraswanti with a short position of Natura City. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Saraswanti and Natura City.
Diversification Opportunities for PT Saraswanti and Natura City
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SWID and Natura is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PT Saraswanti Indoland 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 PT Saraswanti 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 Saraswanti Indoland 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 PT Saraswanti i.e., PT Saraswanti and Natura City go up and down completely randomly.
Pair Corralation between PT Saraswanti and Natura City
Assuming the 90 days trading horizon PT Saraswanti Indoland is expected to under-perform the Natura City. But the stock apears to be less risky and, when comparing its historical volatility, PT Saraswanti Indoland is 4.36 times less risky than Natura City. The stock trades about -0.11 of its potential returns per unit of risk. The 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 Against |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
PT Saraswanti Indoland vs. Natura City Developments
Performance |
Timeline |
PT Saraswanti Indoland |
Natura City Developments |
PT Saraswanti and Natura City Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Saraswanti and Natura City
The main advantage of trading using opposite PT Saraswanti and Natura City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Saraswanti 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.PT Saraswanti vs. Jaya Sukses Makmur | PT Saraswanti vs. Hanson International Tbk | PT Saraswanti vs. Pollux Investasi Internasional | PT Saraswanti vs. Adhi Commuter Properti |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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