Correlation Between Surya Toto and Mark Dynamics

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

By analyzing existing cross correlation between Surya Toto Indonesia and Mark Dynamics Indonesia, you can compare the effects of market volatilities on Surya Toto and Mark Dynamics 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 Toto with a short position of Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Toto and Mark Dynamics.

Diversification Opportunities for Surya Toto and Mark Dynamics

0.2

Correlation Coefficient

Surya Toto  Mark Dynamics

Modest diversification

The 3 months correlation between Surya and Mark is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Surya Toto Indonesia and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics Indonesia and Surya Toto 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 Toto Indonesia are associated (or correlated) with Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Surya Toto i.e., Surya Toto and Mark Dynamics go up and down completely randomly.

Pair Corralation between Surya Toto and Mark Dynamics

Assuming the 90 days trading horizon Surya Toto is expected to generate 2.85 times less return on investment than Mark Dynamics. But when comparing it to its historical volatility, Surya Toto Indonesia is 2.28 times less risky than Mark Dynamics. It trades about 0.07 of its potential returns per unit of risk. Mark Dynamics Indonesia is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  92,218  in Mark Dynamics Indonesia on September 15, 2024 and sell it today you would earn a total of  13,782  from holding Mark Dynamics Indonesia or generate 14.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Surya Toto Indonesia  vs.  Mark Dynamics Indonesia

Surya Toto Indonesia

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Surya Toto Indonesia are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Surya Toto is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Mark Dynamics Indonesia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mark Dynamics Indonesia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Mark Dynamics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Surya Toto and Mark Dynamics

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

The idea behind Surya Toto Indonesia and Mark Dynamics Indonesia 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.