Correlation Between Sawit Sumbermas and Target
Can any of the company-specific risk be diversified away by investing in both Sawit Sumbermas and Target 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 Sawit Sumbermas and Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sawit Sumbermas Sarana and Target, you can compare the effects of market volatilities on Sawit Sumbermas and Target 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 Sawit Sumbermas with a short position of Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sawit Sumbermas and Target.
Diversification Opportunities for Sawit Sumbermas and Target
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sawit and Target is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sawit Sumbermas Sarana and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target and Sawit Sumbermas 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 Sawit Sumbermas Sarana are associated (or correlated) with Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of Sawit Sumbermas i.e., Sawit Sumbermas and Target go up and down completely randomly.
Pair Corralation between Sawit Sumbermas and Target
Assuming the 90 days trading horizon Sawit Sumbermas Sarana is expected to under-perform the Target. In addition to that, Sawit Sumbermas is 1.05 times more volatile than Target. It trades about -0.09 of its total potential returns per unit of risk. Target is currently generating about 0.12 per unit of volatility. If you would invest 15,015 in Target on January 25, 2024 and sell it today you would earn a total of 1,587 from holding Target or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Sawit Sumbermas Sarana vs. Target
Performance |
| Timeline |
| Sawit Sumbermas Sarana |
| Target |
Sawit Sumbermas and Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sawit Sumbermas and Target
The main advantage of trading using opposite Sawit Sumbermas and Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sawit Sumbermas position performs unexpectedly, Target 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 Target will offset losses from the drop in Target's long position.| Sawit Sumbermas vs. Vale Indonesia Tbk | Sawit Sumbermas vs. Timah Persero Tbk | Sawit Sumbermas vs. United Tractors Tbk | Sawit Sumbermas vs. Semen Indonesia Persero |
| Target vs. Costco Wholesale Corp | Target vs. BJs Wholesale Club | Target vs. Dollar Tree | Target vs. Dollar General |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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