Correlation Between Supra Boga and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Supra Boga 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 Supra Boga and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supra Boga Lestari and NYSE Composite, you can compare the effects of market volatilities on Supra Boga 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 Supra Boga with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supra Boga and NYSE Composite.
Diversification Opportunities for Supra Boga and NYSE Composite
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Supra and NYSE is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Supra Boga Lestari and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Supra Boga 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 Supra Boga Lestari 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 Supra Boga i.e., Supra Boga and NYSE Composite go up and down completely randomly.
Pair Corralation between Supra Boga and NYSE Composite
Assuming the 90 days trading horizon Supra Boga Lestari is expected to generate 2.56 times more return on investment than NYSE Composite. However, Supra Boga is 2.56 times more volatile than NYSE Composite. It trades about 0.11 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.18 per unit of risk. If you would invest 57,000 in Supra Boga Lestari on January 29, 2024 and sell it today you would earn a total of 1,500 from holding Supra Boga Lestari or generate 2.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 71.43% |
Values | Daily Returns |
Supra Boga Lestari vs. NYSE Composite
Performance |
Timeline |
Supra Boga and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Supra Boga Lestari
Pair trading matchups for Supra Boga
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Supra Boga and NYSE Composite
The main advantage of trading using opposite Supra Boga and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supra Boga 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.Supra Boga vs. Sariguna Primatirta PT | Supra Boga vs. Ultra Jaya Milk | Supra Boga vs. Kino Indonesia Tbk | Supra Boga vs. Medikaloka Hermina PT |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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