Correlation Between Abm Investama and Ekadharma International
Can any of the company-specific risk be diversified away by investing in both Abm Investama and Ekadharma International 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 Abm Investama and Ekadharma International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abm Investama Tbk and Ekadharma International Tbk, you can compare the effects of market volatilities on Abm Investama and Ekadharma International 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 Abm Investama with a short position of Ekadharma International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abm Investama and Ekadharma International.
Diversification Opportunities for Abm Investama and Ekadharma International
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abm and Ekadharma is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Abm Investama Tbk and Ekadharma International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekadharma International and Abm Investama 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 Abm Investama Tbk are associated (or correlated) with Ekadharma International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekadharma International has no effect on the direction of Abm Investama i.e., Abm Investama and Ekadharma International go up and down completely randomly.
Pair Corralation between Abm Investama and Ekadharma International
Assuming the 90 days trading horizon Abm Investama Tbk is expected to under-perform the Ekadharma International. In addition to that, Abm Investama is 1.95 times more volatile than Ekadharma International Tbk. It trades about -0.21 of its total potential returns per unit of risk. Ekadharma International Tbk is currently generating about -0.11 per unit of volatility. If you would invest 23,000 in Ekadharma International Tbk on August 28, 2024 and sell it today you would lose (600.00) from holding Ekadharma International Tbk or give up 2.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Abm Investama Tbk vs. Ekadharma International Tbk
Performance |
Timeline |
Abm Investama Tbk |
Ekadharma International |
Abm Investama and Ekadharma International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Abm Investama and Ekadharma International
The main advantage of trading using opposite Abm Investama and Ekadharma International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abm Investama position performs unexpectedly, Ekadharma International 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 Ekadharma International will offset losses from the drop in Ekadharma International's long position.Abm Investama vs. Baramulti Suksessarana Tbk | Abm Investama vs. Mitrabara Adiperdana PT | Abm Investama vs. Sumber Alfaria Trijaya | Abm Investama vs. Surya Esa Perkasa |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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