Correlation Between Solusi Bangun and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Solusi Bangun and NYSE Composite 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 Solusi Bangun and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solusi Bangun Indonesia and NYSE Composite, you can compare the effects of market volatilities on Solusi Bangun and NYSE Composite 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 Solusi Bangun with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solusi Bangun and NYSE Composite.
Diversification Opportunities for Solusi Bangun and NYSE Composite
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solusi and NYSE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Solusi Bangun Indonesia and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Solusi Bangun 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 Solusi Bangun Indonesia are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Solusi Bangun i.e., Solusi Bangun and NYSE Composite go up and down completely randomly.
Pair Corralation between Solusi Bangun and NYSE Composite
Assuming the 90 days trading horizon Solusi Bangun Indonesia is expected to generate 0.44 times more return on investment than NYSE Composite. However, Solusi Bangun Indonesia is 2.27 times less risky than NYSE Composite. It trades about 0.33 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.07 per unit of risk. If you would invest 129,500 in Solusi Bangun Indonesia on February 7, 2024 and sell it today you would earn a total of 2,000 from holding Solusi Bangun Indonesia or generate 1.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 68.18% |
Values | Daily Returns |
Solusi Bangun Indonesia vs. NYSE Composite
Performance |
Timeline |
Solusi Bangun and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Solusi Bangun Indonesia
Pair trading matchups for Solusi Bangun
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Solusi Bangun and NYSE Composite
The main advantage of trading using opposite Solusi Bangun and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solusi Bangun position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Solusi Bangun vs. Semen Indonesia Persero | Solusi Bangun vs. Indocement Tunggal Prakarsa | Solusi Bangun vs. Bakrie Sumatera Plantations | Solusi Bangun vs. Timah Persero Tbk |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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