Correlation Between Austindo Nusantara and Eagle High
Can any of the company-specific risk be diversified away by investing in both Austindo Nusantara and Eagle High 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 Austindo Nusantara and Eagle High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austindo Nusantara Jaya and Eagle High Plantations, you can compare the effects of market volatilities on Austindo Nusantara and Eagle High 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 Austindo Nusantara with a short position of Eagle High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austindo Nusantara and Eagle High.
Diversification Opportunities for Austindo Nusantara and Eagle High
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Austindo and Eagle is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Austindo Nusantara Jaya and Eagle High Plantations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle High Plantations and Austindo Nusantara 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 Austindo Nusantara Jaya are associated (or correlated) with Eagle High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle High Plantations has no effect on the direction of Austindo Nusantara i.e., Austindo Nusantara and Eagle High go up and down completely randomly.
Pair Corralation between Austindo Nusantara and Eagle High
Assuming the 90 days trading horizon Austindo Nusantara is expected to generate 4.4 times less return on investment than Eagle High. But when comparing it to its historical volatility, Austindo Nusantara Jaya is 2.11 times less risky than Eagle High. It trades about 0.01 of its potential returns per unit of risk. Eagle High Plantations is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,200 in Eagle High Plantations on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Eagle High Plantations or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Austindo Nusantara Jaya vs. Eagle High Plantations
Performance |
| Timeline |
| Austindo Nusantara Jaya |
| Eagle High Plantations |
Austindo Nusantara and Eagle High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austindo Nusantara and Eagle High
The main advantage of trading using opposite Austindo Nusantara and Eagle High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austindo Nusantara position performs unexpectedly, Eagle High 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 Eagle High will offset losses from the drop in Eagle High's long position.| Austindo Nusantara vs. Dharma Satya Nusantara | Austindo Nusantara vs. Provident Agro Tbk | Austindo Nusantara vs. Salim Ivomas Pratama | Austindo Nusantara vs. Jaya Agra Wattie |
| Eagle High vs. Perusahaan Perkebunan London | Eagle High vs. Salim Ivomas Pratama | Eagle High vs. Alam Sutera Realty | Eagle High vs. Delta Dunia Makmur |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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