Correlation Between Era Media and Pudjiadi Sons
Can any of the company-specific risk be diversified away by investing in both Era Media and Pudjiadi Sons 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 Pudjiadi Sons 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 Pudjiadi Sons Tbk, you can compare the effects of market volatilities on Era Media and Pudjiadi Sons 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 Pudjiadi Sons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Era Media and Pudjiadi Sons.
Diversification Opportunities for Era Media and Pudjiadi Sons
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Era and Pudjiadi is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Era Media Sejahtera and Pudjiadi Sons Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pudjiadi Sons Tbk 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 Pudjiadi Sons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pudjiadi Sons Tbk has no effect on the direction of Era Media i.e., Era Media and Pudjiadi Sons go up and down completely randomly.
Pair Corralation between Era Media and Pudjiadi Sons
Assuming the 90 days trading horizon Era Media is expected to generate 2.6 times less return on investment than Pudjiadi Sons. In addition to that, Era Media is 1.45 times more volatile than Pudjiadi Sons Tbk. It trades about 0.03 of its total potential returns per unit of risk. Pudjiadi Sons Tbk is currently generating about 0.12 per unit of volatility. If you would invest 39,026 in Pudjiadi Sons Tbk on September 12, 2024 and sell it today you would earn a total of 90,974 from holding Pudjiadi Sons Tbk or generate 233.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Era Media Sejahtera vs. Pudjiadi Sons Tbk
Performance |
| Timeline |
| Era Media Sejahtera |
| Pudjiadi Sons Tbk |
Era Media and Pudjiadi Sons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Era Media and Pudjiadi Sons
The main advantage of trading using opposite Era Media and Pudjiadi Sons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Era Media position performs unexpectedly, Pudjiadi Sons 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 Pudjiadi Sons will offset losses from the drop in Pudjiadi Sons' 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 |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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