Correlation Between Diamond Citra and Era Mandiri
Can any of the company-specific risk be diversified away by investing in both Diamond Citra 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 Diamond Citra and Era Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Citra Propertindo and Era Mandiri Cemerlang, you can compare the effects of market volatilities on Diamond Citra 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 Diamond Citra with a short position of Era Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Citra and Era Mandiri.
Diversification Opportunities for Diamond Citra and Era Mandiri
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diamond and Era is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Citra Propertindo 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 Diamond Citra 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 Diamond Citra Propertindo 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 Diamond Citra i.e., Diamond Citra and Era Mandiri go up and down completely randomly.
Pair Corralation between Diamond Citra and Era Mandiri
Assuming the 90 days trading horizon Diamond Citra Propertindo is expected to generate 5.72 times more return on investment than Era Mandiri. However, Diamond Citra is 5.72 times more volatile than Era Mandiri Cemerlang. It trades about -0.03 of its potential returns per unit of risk. Era Mandiri Cemerlang is currently generating about -0.64 per unit of risk. If you would invest 800.00 in Diamond Citra Propertindo on September 4, 2024 and sell it today you would lose (100.00) from holding Diamond Citra Propertindo or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Citra Propertindo vs. Era Mandiri Cemerlang
Performance |
| Timeline |
| Diamond Citra Propertindo |
| Era Mandiri Cemerlang |
Diamond Citra and Era Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Citra and Era Mandiri
The main advantage of trading using opposite Diamond Citra and Era Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Citra 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.| Diamond Citra vs. Bima Sakti Pertiwi | Diamond Citra vs. Karya Bersama Anugerah | Diamond Citra vs. Pollux Properti Indonesia | Diamond Citra vs. Surya Permata Andalan |
| Era Mandiri vs. Dharma Satya Nusantara | Era Mandiri vs. Saratoga Investama Sedaya | Era Mandiri vs. Surya Esa Perkasa | Era Mandiri vs. Elang Mahkota Teknologi |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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