Correlation Between Estika Tata and Pratama Abadi
Can any of the company-specific risk be diversified away by investing in both Estika Tata and Pratama 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 Pratama 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 Pratama Abadi Nusa, you can compare the effects of market volatilities on Estika Tata and Pratama 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 Pratama Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estika Tata and Pratama Abadi.
Diversification Opportunities for Estika Tata and Pratama Abadi
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Estika and Pratama is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Estika Tata Tiara and Pratama Abadi Nusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pratama Abadi Nusa 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 Pratama Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pratama Abadi Nusa has no effect on the direction of Estika Tata i.e., Estika Tata and Pratama Abadi go up and down completely randomly.
Pair Corralation between Estika Tata and Pratama Abadi
Assuming the 90 days trading horizon Estika Tata is expected to generate 2.6 times less return on investment than Pratama Abadi. In addition to that, Estika Tata is 1.23 times more volatile than Pratama Abadi Nusa. It trades about 0.05 of its total potential returns per unit of risk. Pratama Abadi Nusa is currently generating about 0.17 per unit of volatility. If you would invest 100,500 in Pratama Abadi Nusa on September 3, 2024 and sell it today you would earn a total of 1,454,500 from holding Pratama Abadi Nusa or generate 1447.26% 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. Pratama Abadi Nusa
Performance |
| Timeline |
| Estika Tata Tiara |
| Pratama Abadi Nusa |
Estika Tata and Pratama Abadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estika Tata and Pratama Abadi
The main advantage of trading using opposite Estika Tata and Pratama Abadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estika Tata position performs unexpectedly, Pratama 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 Pratama Abadi will offset losses from the drop in Pratama Abadi's long position.| Estika Tata vs. Garudafood Putra Putri | Estika Tata vs. PT Wahana Interfood | Estika Tata vs. Mitra Pinasthika Mustika | Estika Tata vs. Jakarta Int Hotels |
| Pratama Abadi vs. Garudafood Putra Putri | Pratama Abadi vs. Prima Cakrawala Abadi | Pratama Abadi vs. Mahkota Group Tbk | Pratama Abadi vs. MNC Studios International |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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