Correlation Between Bank Central and Erajaya Swasembada
Can any of the company-specific risk be diversified away by investing in both Bank Central and Erajaya Swasembada 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 Bank Central and Erajaya Swasembada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Erajaya Swasembada Tbk, you can compare the effects of market volatilities on Bank Central and Erajaya Swasembada 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 Bank Central with a short position of Erajaya Swasembada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Erajaya Swasembada.
Diversification Opportunities for Bank Central and Erajaya Swasembada
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Erajaya is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Erajaya Swasembada Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erajaya Swasembada Tbk and Bank Central 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 Bank Central Asia are associated (or correlated) with Erajaya Swasembada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erajaya Swasembada Tbk has no effect on the direction of Bank Central i.e., Bank Central and Erajaya Swasembada go up and down completely randomly.
Pair Corralation between Bank Central and Erajaya Swasembada
Assuming the 90 days trading horizon Bank Central Asia is expected to under-perform the Erajaya Swasembada. But the stock apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 2.52 times less risky than Erajaya Swasembada. The stock trades about -0.05 of its potential returns per unit of risk. The Erajaya Swasembada Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 38,000 in Erajaya Swasembada Tbk on November 27, 2024 and sell it today you would lose (400.00) from holding Erajaya Swasembada Tbk or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Erajaya Swasembada Tbk
Performance |
| Timeline |
| Bank Central Asia |
| Erajaya Swasembada Tbk |
Bank Central and Erajaya Swasembada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Erajaya Swasembada
The main advantage of trading using opposite Bank Central and Erajaya Swasembada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Erajaya Swasembada 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 Erajaya Swasembada will offset losses from the drop in Erajaya Swasembada's long position.| Bank Central vs. Bank Rakyat Indonesia | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Bank Negara Indonesia | Bank Central vs. Astra International Tbk |
| Erajaya Swasembada vs. Ace Hardware Indonesia | Erajaya Swasembada vs. Japfa Comfeed Indonesia | Erajaya Swasembada vs. XL Axiata Tbk | Erajaya Swasembada vs. Pembangunan Perumahan PT |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |