Correlation Between Superior Plus and Perusahaan Perseroan

Can any of the company-specific risk be diversified away by investing in both Superior Plus and Perusahaan Perseroan 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 Superior Plus and Perusahaan Perseroan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Superior Plus Corp and Perusahaan Perseroan PT, you can compare the effects of market volatilities on Superior Plus and Perusahaan Perseroan 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 Superior Plus with a short position of Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Perusahaan Perseroan.

Diversification Opportunities for Superior Plus and Perusahaan Perseroan

0.55

Correlation Coefficient

Superior Plus  Perusahaan Perseroan

Very weak diversification

The 3 months correlation between Superior and Perusahaan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of Superior Plus i.e., Superior Plus and Perusahaan Perseroan go up and down completely randomly.

Pair Corralation between Superior Plus and Perusahaan Perseroan

Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Perusahaan Perseroan. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.84 times less risky than Perusahaan Perseroan. The stock trades about -0.08 of its potential returns per unit of risk. The Perusahaan Perseroan PT is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,631  in Perusahaan Perseroan PT on March 16, 2024 and sell it today you would lose (1.00) from holding Perusahaan Perseroan PT or give up 0.06% of portfolio value over 90 days.

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

Superior Plus Corp  vs.  Perusahaan Perseroan PT

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Superior Plus is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Perusahaan Perseroan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Superior Plus and Perusahaan Perseroan

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

The idea behind Superior Plus Corp and Perusahaan Perseroan PT 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.