Correlation Between Andalan Perkasa and Sawit Sumbermas
Can any of the company-specific risk be diversified away by investing in both Andalan Perkasa and Sawit Sumbermas 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 Andalan Perkasa and Sawit Sumbermas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andalan Perkasa Abadi and Sawit Sumbermas Sarana, you can compare the effects of market volatilities on Andalan Perkasa and Sawit Sumbermas 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 Andalan Perkasa with a short position of Sawit Sumbermas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andalan Perkasa and Sawit Sumbermas.
Diversification Opportunities for Andalan Perkasa and Sawit Sumbermas
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Andalan and Sawit is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Andalan Perkasa Abadi and Sawit Sumbermas Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sawit Sumbermas Sarana and Andalan Perkasa 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 Andalan Perkasa Abadi are associated (or correlated) with Sawit Sumbermas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sawit Sumbermas Sarana has no effect on the direction of Andalan Perkasa i.e., Andalan Perkasa and Sawit Sumbermas go up and down completely randomly.
Pair Corralation between Andalan Perkasa and Sawit Sumbermas
Assuming the 90 days trading horizon Andalan Perkasa Abadi is expected to under-perform the Sawit Sumbermas. But the stock apears to be less risky and, when comparing its historical volatility, Andalan Perkasa Abadi is 1.02 times less risky than Sawit Sumbermas. The stock trades about -0.09 of its potential returns per unit of risk. The Sawit Sumbermas Sarana is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 90,366 in Sawit Sumbermas Sarana on January 25, 2024 and sell it today you would earn a total of 12,134 from holding Sawit Sumbermas Sarana or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andalan Perkasa Abadi vs. Sawit Sumbermas Sarana
Performance |
| Timeline |
| Andalan Perkasa Abadi |
| Sawit Sumbermas Sarana |
Andalan Perkasa and Sawit Sumbermas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andalan Perkasa and Sawit Sumbermas
The main advantage of trading using opposite Andalan Perkasa and Sawit Sumbermas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andalan Perkasa position performs unexpectedly, Sawit Sumbermas 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 Sawit Sumbermas will offset losses from the drop in Sawit Sumbermas' long position.| Andalan Perkasa vs. Mahaka Radio Integra | Andalan Perkasa vs. Sejahteraraya Anugrahjaya Tbk | Andalan Perkasa vs. Ateliers Mecaniques DIndonesie | Andalan Perkasa vs. Sanurhasta Mitra PT |
| Sawit Sumbermas vs. Vale Indonesia Tbk | Sawit Sumbermas vs. Timah Persero Tbk | Sawit Sumbermas vs. United Tractors Tbk | Sawit Sumbermas vs. Semen Indonesia Persero |
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 CEOs Directory module to screen CEOs from public companies around the world.
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