Correlation Between Estika Tata and Era Mandiri
Can any of the company-specific risk be diversified away by investing in both Estika Tata and Era Mandiri 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 Era Mandiri 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 Era Mandiri Cemerlang, you can compare the effects of market volatilities on Estika Tata and Era Mandiri 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 Era Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estika Tata and Era Mandiri.
Diversification Opportunities for Estika Tata and Era Mandiri
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Estika and Era is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Estika Tata Tiara and Era Mandiri Cemerlang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Mandiri Cemerlang 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 Era Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Mandiri Cemerlang has no effect on the direction of Estika Tata i.e., Estika Tata and Era Mandiri go up and down completely randomly.
Pair Corralation between Estika Tata and Era Mandiri
Assuming the 90 days trading horizon Estika Tata is expected to generate 1.14 times less return on investment than Era Mandiri. In addition to that, Estika Tata is 1.16 times more volatile than Era Mandiri Cemerlang. It trades about 0.04 of its total potential returns per unit of risk. Era Mandiri Cemerlang is currently generating about 0.05 per unit of volatility. If you would invest 5,800 in Era Mandiri Cemerlang on November 27, 2024 and sell it today you would earn a total of 3,800 from holding Era Mandiri Cemerlang or generate 65.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estika Tata Tiara vs. Era Mandiri Cemerlang
Performance |
| Timeline |
| Estika Tata Tiara |
| Era Mandiri Cemerlang |
Estika Tata and Era Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estika Tata and Era Mandiri
The main advantage of trading using opposite Estika Tata and Era Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estika Tata position performs unexpectedly, Era Mandiri 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 Era Mandiri will offset losses from the drop in Era Mandiri'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 |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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