Correlation Between Delta Dunia and Erajaya Swasembada
Can any of the company-specific risk be diversified away by investing in both Delta Dunia 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 Delta Dunia and Erajaya Swasembada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Dunia Makmur and Erajaya Swasembada Tbk, you can compare the effects of market volatilities on Delta Dunia 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 Delta Dunia with a short position of Erajaya Swasembada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Dunia and Erajaya Swasembada.
Diversification Opportunities for Delta Dunia and Erajaya Swasembada
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Delta and Erajaya is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Delta Dunia Makmur 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 Delta Dunia 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 Delta Dunia Makmur 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 Delta Dunia i.e., Delta Dunia and Erajaya Swasembada go up and down completely randomly.
Pair Corralation between Delta Dunia and Erajaya Swasembada
Assuming the 90 days trading horizon Delta Dunia Makmur is expected to generate 1.2 times more return on investment than Erajaya Swasembada. However, Delta Dunia is 1.2 times more volatile than Erajaya Swasembada Tbk. It trades about 0.08 of its potential returns per unit of risk. Erajaya Swasembada Tbk is currently generating about 0.01 per unit of risk. If you would invest 36,182 in Delta Dunia Makmur on August 28, 2024 and sell it today you would earn a total of 34,318 from holding Delta Dunia Makmur or generate 94.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Delta Dunia Makmur vs. Erajaya Swasembada Tbk
Performance |
| Timeline |
| Delta Dunia Makmur |
| Erajaya Swasembada Tbk |
Delta Dunia and Erajaya Swasembada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Dunia and Erajaya Swasembada
The main advantage of trading using opposite Delta Dunia and Erajaya Swasembada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Dunia 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.| Delta Dunia vs. Indika Energy Tbk | Delta Dunia vs. Elnusa Tbk | Delta Dunia vs. Harum Energy Tbk | Delta Dunia vs. Energi Mega Persada |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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