Correlation Between Era Media and Garudafood Putra
Can any of the company-specific risk be diversified away by investing in both Era Media and Garudafood Putra 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 Era Media and Garudafood Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Era Media Sejahtera and Garudafood Putra Putri, you can compare the effects of market volatilities on Era Media and Garudafood Putra 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 Era Media with a short position of Garudafood Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Era Media and Garudafood Putra.
Diversification Opportunities for Era Media and Garudafood Putra
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Era and Garudafood is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Era Media Sejahtera and Garudafood Putra Putri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garudafood Putra Putri and Era Media 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 Era Media Sejahtera are associated (or correlated) with Garudafood Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garudafood Putra Putri has no effect on the direction of Era Media i.e., Era Media and Garudafood Putra go up and down completely randomly.
Pair Corralation between Era Media and Garudafood Putra
Assuming the 90 days trading horizon Era Media Sejahtera is expected to generate 0.63 times more return on investment than Garudafood Putra. However, Era Media Sejahtera is 1.59 times less risky than Garudafood Putra. It trades about -0.05 of its potential returns per unit of risk. Garudafood Putra Putri is currently generating about -0.18 per unit of risk. If you would invest 5,600 in Era Media Sejahtera on September 2, 2024 and sell it today you would lose (100.00) from holding Era Media Sejahtera or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Era Media Sejahtera vs. Garudafood Putra Putri
Performance |
| Timeline |
| Era Media Sejahtera |
| Garudafood Putra Putri |
Era Media and Garudafood Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Era Media and Garudafood Putra
The main advantage of trading using opposite Era Media and Garudafood Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Era Media position performs unexpectedly, Garudafood Putra 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 Garudafood Putra will offset losses from the drop in Garudafood Putra's long position.| Era Media vs. Bank Central Asia | Era Media vs. Bank Rakyat Indonesia | Era Media vs. Bayan Resources Tbk | Era Media vs. Bank Mandiri Persero |
| Garudafood Putra vs. Bank BRISyariah Tbk | Garudafood Putra vs. Mitra Pinasthika Mustika | Garudafood Putra vs. Jakarta Int Hotels | Garudafood Putra vs. Indosterling Technomedia 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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