Correlation Between Elang Mahkota and Sumber Alfaria
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Sumber Alfaria 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 Elang Mahkota and Sumber Alfaria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elang Mahkota Teknologi and Sumber Alfaria Trijaya, you can compare the effects of market volatilities on Elang Mahkota and Sumber Alfaria 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 Elang Mahkota with a short position of Sumber Alfaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Sumber Alfaria.
Diversification Opportunities for Elang Mahkota and Sumber Alfaria
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elang and Sumber is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Sumber Alfaria Trijaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Alfaria Trijaya and Elang Mahkota 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 Elang Mahkota Teknologi are associated (or correlated) with Sumber Alfaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Alfaria Trijaya has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Sumber Alfaria go up and down completely randomly.
Pair Corralation between Elang Mahkota and Sumber Alfaria
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to generate 1.62 times more return on investment than Sumber Alfaria. However, Elang Mahkota is 1.62 times more volatile than Sumber Alfaria Trijaya. It trades about 0.12 of its potential returns per unit of risk. Sumber Alfaria Trijaya is currently generating about 0.04 per unit of risk. If you would invest 37,800 in Elang Mahkota Teknologi on November 3, 2024 and sell it today you would earn a total of 19,200 from holding Elang Mahkota Teknologi or generate 50.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Sumber Alfaria Trijaya
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Sumber Alfaria Trijaya |
Elang Mahkota and Sumber Alfaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Sumber Alfaria
The main advantage of trading using opposite Elang Mahkota and Sumber Alfaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Sumber Alfaria 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 Sumber Alfaria will offset losses from the drop in Sumber Alfaria's long position.| Elang Mahkota vs. Bank Artos Indonesia | Elang Mahkota vs. PT Bukalapak | Elang Mahkota vs. Sumber Alfaria Trijaya | Elang Mahkota vs. Merdeka Copper Gold |
| Sumber Alfaria vs. Elang Mahkota Teknologi | Sumber Alfaria vs. Ace Hardware Indonesia | Sumber Alfaria vs. BFI Finance Indonesia | Sumber Alfaria vs. Tower Bersama Infrastructure |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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