Correlation Between Elang Mahkota and Delta Dunia
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Delta Dunia 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 Delta Dunia 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 Delta Dunia Makmur, you can compare the effects of market volatilities on Elang Mahkota and Delta Dunia 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 Delta Dunia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Delta Dunia.
Diversification Opportunities for Elang Mahkota and Delta Dunia
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elang and Delta is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Delta Dunia Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Dunia Makmur 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 Delta Dunia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Dunia Makmur has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Delta Dunia go up and down completely randomly.
Pair Corralation between Elang Mahkota and Delta Dunia
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to under-perform the Delta Dunia. But the stock apears to be less risky and, when comparing its historical volatility, Elang Mahkota Teknologi is 1.04 times less risky than Delta Dunia. The stock trades about -0.03 of its potential returns per unit of risk. The Delta Dunia Makmur is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 36,182 in Delta Dunia Makmur on August 28, 2024 and sell it today you would earn a total of 34,318 from holding Delta Dunia Makmur or generate 94.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Delta Dunia Makmur
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Delta Dunia Makmur |
Elang Mahkota and Delta Dunia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Delta Dunia
The main advantage of trading using opposite Elang Mahkota and Delta Dunia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Delta Dunia 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 Delta Dunia will offset losses from the drop in Delta Dunia's long position.| Elang Mahkota vs. Mnc Land Tbk | Elang Mahkota vs. MNC Vision Networks | Elang Mahkota vs. Medikaloka Hermina PT |
| Delta Dunia vs. Indika Energy Tbk | Delta Dunia vs. Elnusa Tbk | Delta Dunia vs. Harum Energy Tbk | Delta Dunia vs. Energi Mega Persada |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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