Correlation Between Estika Tata and Hartadinata Abadi
Can any of the company-specific risk be diversified away by investing in both Estika Tata and Hartadinata Abadi 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 Estika Tata and Hartadinata Abadi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Estika Tata Tiara and Hartadinata Abadi Tbk, you can compare the effects of market volatilities on Estika Tata and Hartadinata Abadi 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 Estika Tata with a short position of Hartadinata Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estika Tata and Hartadinata Abadi.
Diversification Opportunities for Estika Tata and Hartadinata Abadi
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Estika and Hartadinata is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Estika Tata Tiara and Hartadinata Abadi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartadinata Abadi Tbk and Estika Tata 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 Estika Tata Tiara are associated (or correlated) with Hartadinata Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartadinata Abadi Tbk has no effect on the direction of Estika Tata i.e., Estika Tata and Hartadinata Abadi go up and down completely randomly.
Pair Corralation between Estika Tata and Hartadinata Abadi
Assuming the 90 days trading horizon Estika Tata Tiara is expected to generate 1.11 times more return on investment than Hartadinata Abadi. However, Estika Tata is 1.11 times more volatile than Hartadinata Abadi Tbk. It trades about -0.28 of its potential returns per unit of risk. Hartadinata Abadi Tbk is currently generating about -0.44 per unit of risk. If you would invest 14,400 in Estika Tata Tiara on August 26, 2024 and sell it today you would lose (2,100) from holding Estika Tata Tiara or give up 14.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estika Tata Tiara vs. Hartadinata Abadi Tbk
Performance |
| Timeline |
| Estika Tata Tiara |
| Hartadinata Abadi Tbk |
Estika Tata and Hartadinata Abadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estika Tata and Hartadinata Abadi
The main advantage of trading using opposite Estika Tata and Hartadinata Abadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estika Tata position performs unexpectedly, Hartadinata Abadi 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 Hartadinata Abadi will offset losses from the drop in Hartadinata Abadi's long position.| Estika Tata vs. Sentra Food Indonesia | Estika Tata vs. Buyung Poetra Sembada | Estika Tata vs. Garudafood Putra Putri | Estika Tata vs. Campina Ice Cream |
| Hartadinata Abadi vs. Steel Pipe Industry | Hartadinata Abadi vs. Puradelta Lestari PT | Hartadinata Abadi vs. Jasa Armada Indonesia | Hartadinata Abadi vs. Integra Indocabinet Tbk |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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