Correlation Between PT Trimuda and Adi Sarana

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

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

Diversification Opportunities for PT Trimuda and Adi Sarana

0.29

Correlation Coefficient

PT Trimuda  Adi Sarana

Modest diversification

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

Pair Corralation between PT Trimuda and Adi Sarana

Assuming the 90 days trading horizon PT Trimuda Nuansa is expected to under-perform the Adi Sarana. In addition to that, PT Trimuda is 4.95 times more volatile than Adi Sarana Armada. It trades about -0.08 of its total potential returns per unit of risk. Adi Sarana Armada is currently generating about 0.03 per unit of volatility. If you would invest  70,054  in Adi Sarana Armada on September 16, 2024 and sell it today you would earn a total of  1,446  from holding Adi Sarana Armada or generate 2.06% return on investment over 90 days.

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

PT Trimuda Nuansa  vs.  Adi Sarana Armada

PT Trimuda Nuansa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Trimuda Nuansa 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.

Adi Sarana Armada

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Adi Sarana Armada are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Adi Sarana is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with PT Trimuda and Adi Sarana

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

The idea behind PT Trimuda Nuansa and Adi Sarana Armada 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..