Correlation Between Integra Indocabinet and Sidomulyo Selaras

Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Sidomulyo Selaras 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 Integra Indocabinet and Sidomulyo Selaras into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integra Indocabinet Tbk and Sidomulyo Selaras Tbk, you can compare the effects of market volatilities on Integra Indocabinet and Sidomulyo Selaras 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 Integra Indocabinet with a short position of Sidomulyo Selaras. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and Sidomulyo Selaras.

Diversification Opportunities for Integra Indocabinet and Sidomulyo Selaras

-0.36

Correlation Coefficient

Integra Indocabinet  Sidomulyo Selaras

Very good diversification

The 3 months correlation between Integra and Sidomulyo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Sidomulyo Selaras Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidomulyo Selaras Tbk and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with Sidomulyo Selaras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidomulyo Selaras Tbk has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Sidomulyo Selaras go up and down completely randomly.

Pair Corralation between Integra Indocabinet and Sidomulyo Selaras

Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to generate 1.28 times more return on investment than Sidomulyo Selaras. However, Integra Indocabinet is 1.28 times more volatile than Sidomulyo Selaras Tbk. It trades about 0.17 of its potential returns per unit of risk. Sidomulyo Selaras Tbk is currently generating about 0.0 per unit of risk. If you would invest  23,600  in Integra Indocabinet Tbk on September 13, 2024 and sell it today you would earn a total of  11,600  from holding Integra Indocabinet Tbk or generate 49.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Integra Indocabinet Tbk  vs.  Sidomulyo Selaras Tbk

Integra Indocabinet Tbk

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Indocabinet Tbk are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Integra Indocabinet disclosed solid returns over the last few months and may actually be approaching a breakup point.

Sidomulyo Selaras Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sidomulyo Selaras Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sidomulyo Selaras 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 Integra Indocabinet and Sidomulyo Selaras

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

The idea behind Integra Indocabinet Tbk and Sidomulyo Selaras Tbk 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.