Correlation Between Ekadharma International and Intanwijaya Internasional
Can any of the company-specific risk be diversified away by investing in both Ekadharma International and Intanwijaya Internasional 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 Ekadharma International and Intanwijaya Internasional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ekadharma International Tbk and Intanwijaya Internasional Tbk, you can compare the effects of market volatilities on Ekadharma International and Intanwijaya Internasional 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 Ekadharma International with a short position of Intanwijaya Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ekadharma International and Intanwijaya Internasional.
Diversification Opportunities for Ekadharma International and Intanwijaya Internasional
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ekadharma and Intanwijaya is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ekadharma International Tbk and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional and Ekadharma International 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 Ekadharma International Tbk are associated (or correlated) with Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Ekadharma International i.e., Ekadharma International and Intanwijaya Internasional go up and down completely randomly.
Pair Corralation between Ekadharma International and Intanwijaya Internasional
Assuming the 90 days trading horizon Ekadharma International Tbk is expected to generate 0.63 times more return on investment than Intanwijaya Internasional. However, Ekadharma International Tbk is 1.58 times less risky than Intanwijaya Internasional. It trades about -0.06 of its potential returns per unit of risk. Intanwijaya Internasional Tbk is currently generating about -0.07 per unit of risk. If you would invest 23,000 in Ekadharma International Tbk on August 28, 2024 and sell it today you would lose (600.00) from holding Ekadharma International Tbk or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ekadharma International Tbk vs. Intanwijaya Internasional Tbk
Performance |
| Timeline |
| Ekadharma International |
| Intanwijaya Internasional |
Ekadharma International and Intanwijaya Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ekadharma International and Intanwijaya Internasional
The main advantage of trading using opposite Ekadharma International and Intanwijaya Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ekadharma International position performs unexpectedly, Intanwijaya Internasional 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 Intanwijaya Internasional will offset losses from the drop in Intanwijaya Internasional's long position.| Ekadharma International vs. Rukun Raharja Tbk | Ekadharma International vs. Weha Transportasi Indonesia |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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