Correlation Between Surya Semesta and Bumi Benowo

Can any of the company-specific risk be diversified away by investing in both Surya Semesta and Bumi Benowo 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 Surya Semesta and Bumi Benowo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Surya Semesta Internusa and Bumi Benowo Sukses, you can compare the effects of market volatilities on Surya Semesta and Bumi Benowo 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 Surya Semesta with a short position of Bumi Benowo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surya Semesta and Bumi Benowo.

Diversification Opportunities for Surya Semesta and Bumi Benowo

0.69

Correlation Coefficient

Surya Semesta  Bumi Benowo

Poor diversification

The 3 months correlation between Surya and Bumi is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Surya Semesta Internusa and Bumi Benowo Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumi Benowo Sukses and Surya Semesta 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 Surya Semesta Internusa are associated (or correlated) with Bumi Benowo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumi Benowo Sukses has no effect on the direction of Surya Semesta i.e., Surya Semesta and Bumi Benowo go up and down completely randomly.

Pair Corralation between Surya Semesta and Bumi Benowo

Assuming the 90 days trading horizon Surya Semesta Internusa is expected to generate 0.95 times more return on investment than Bumi Benowo. However, Surya Semesta Internusa is 1.05 times less risky than Bumi Benowo. It trades about -0.02 of its potential returns per unit of risk. Bumi Benowo Sukses is currently generating about -0.07 per unit of risk. If you would invest  120,000  in Surya Semesta Internusa on March 12, 2024 and sell it today you would lose (4,500) from holding Surya Semesta Internusa or give up 3.75% of portfolio value over 90 days.

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

Surya Semesta Internusa  vs.  Bumi Benowo Sukses

Surya Semesta Internusa

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Surya Semesta Internusa are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Surya Semesta disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bumi Benowo Sukses

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bumi Benowo Sukses are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Bumi Benowo disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Surya Semesta and Bumi Benowo

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

The idea behind Surya Semesta Internusa and Bumi Benowo Sukses 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.