Correlation Between Elang Mahkota and Graha Layar
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Graha Layar 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 Graha Layar 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 Graha Layar Prima, you can compare the effects of market volatilities on Elang Mahkota and Graha Layar 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 Graha Layar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Graha Layar.
Diversification Opportunities for Elang Mahkota and Graha Layar
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elang and Graha is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Graha Layar Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graha Layar Prima 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 Graha Layar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graha Layar Prima has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Graha Layar go up and down completely randomly.
Pair Corralation between Elang Mahkota and Graha Layar
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to under-perform the Graha Layar. But the stock apears to be less risky and, when comparing its historical volatility, Elang Mahkota Teknologi is 1.64 times less risky than Graha Layar. The stock trades about -0.05 of its potential returns per unit of risk. The Graha Layar Prima is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 177,500 in Graha Layar Prima on August 27, 2024 and sell it today you would earn a total of 22,500 from holding Graha Layar Prima or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Graha Layar Prima
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Graha Layar Prima |
Elang Mahkota and Graha Layar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Graha Layar
The main advantage of trading using opposite Elang Mahkota and Graha Layar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Graha Layar 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 Graha Layar will offset losses from the drop in Graha Layar's long position.| Elang Mahkota vs. Mnc Land Tbk | Elang Mahkota vs. MNC Vision Networks | Elang Mahkota vs. Medikaloka Hermina PT |
| Graha Layar vs. Electronic City Indonesia | Graha Layar vs. Bayu Buana Tbk | Graha Layar vs. Bintang Oto Global | Graha Layar vs. Garuda Metalindo 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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