Correlation Between Elang Mahkota and Resource Alam
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Resource Alam 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 Resource Alam 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 Resource Alam Indonesia, you can compare the effects of market volatilities on Elang Mahkota and Resource Alam 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 Resource Alam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Resource Alam.
Diversification Opportunities for Elang Mahkota and Resource Alam
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elang and Resource is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Resource Alam Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resource Alam Indonesia 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 Resource Alam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resource Alam Indonesia has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Resource Alam go up and down completely randomly.
Pair Corralation between Elang Mahkota and Resource Alam
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to generate 2.32 times more return on investment than Resource Alam. However, Elang Mahkota is 2.32 times more volatile than Resource Alam Indonesia. It trades about 0.01 of its potential returns per unit of risk. Resource Alam Indonesia is currently generating about -0.06 per unit of risk. If you would invest 54,500 in Elang Mahkota Teknologi on October 22, 2024 and sell it today you would lose (500.00) from holding Elang Mahkota Teknologi or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Resource Alam Indonesia
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Resource Alam Indonesia |
Elang Mahkota and Resource Alam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Resource Alam
The main advantage of trading using opposite Elang Mahkota and Resource Alam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Resource Alam 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 Resource Alam will offset losses from the drop in Resource Alam'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 |
| Resource Alam vs. Petrosea Tbk | Resource Alam vs. Harum Energy Tbk | Resource Alam vs. Perdana Karya Perkasa | Resource Alam vs. Bayan Resources 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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