Correlation Between Trias Sentosa and PT Sreeya

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

By analyzing existing cross correlation between Trias Sentosa Tbk and PT Sreeya Sewu, you can compare the effects of market volatilities on Trias Sentosa and PT Sreeya 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 Trias Sentosa with a short position of PT Sreeya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trias Sentosa and PT Sreeya.

Diversification Opportunities for Trias Sentosa and PT Sreeya

-0.01

Correlation Coefficient

Trias Sentosa  PT Sreeya

Good diversification

The 3 months correlation between Trias and SIPD is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa Tbk and PT Sreeya Sewu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sreeya Sewu and Trias Sentosa 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 Trias Sentosa Tbk are associated (or correlated) with PT Sreeya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sreeya Sewu has no effect on the direction of Trias Sentosa i.e., Trias Sentosa and PT Sreeya go up and down completely randomly.

Pair Corralation between Trias Sentosa and PT Sreeya

Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to generate 0.55 times more return on investment than PT Sreeya. However, Trias Sentosa Tbk is 1.81 times less risky than PT Sreeya. It trades about 0.0 of its potential returns per unit of risk. PT Sreeya Sewu is currently generating about -0.07 per unit of risk. If you would invest  49,800  in Trias Sentosa Tbk on September 13, 2024 and sell it today you would lose (400.00) from holding Trias Sentosa Tbk or give up 0.8% of portfolio value over 90 days.

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

Trias Sentosa Tbk  vs.  PT Sreeya Sewu

Trias Sentosa Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trias Sentosa Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Trias Sentosa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PT Sreeya Sewu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Sreeya Sewu 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.

Pair Trading with Trias Sentosa and PT Sreeya

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

The idea behind Trias Sentosa Tbk and PT Sreeya Sewu 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.