Correlation Between Elang Mahkota and Mahaka Radio
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Mahaka Radio 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 Mahaka Radio 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 Mahaka Radio Integra, you can compare the effects of market volatilities on Elang Mahkota and Mahaka Radio 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 Mahaka Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Mahaka Radio.
Diversification Opportunities for Elang Mahkota and Mahaka Radio
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Elang and Mahaka is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Mahaka Radio Integra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahaka Radio Integra 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 Mahaka Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahaka Radio Integra has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Mahaka Radio go up and down completely randomly.
Pair Corralation between Elang Mahkota and Mahaka Radio
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to under-perform the Mahaka Radio. But the stock apears to be less risky and, when comparing its historical volatility, Elang Mahkota Teknologi is 1.48 times less risky than Mahaka Radio. The stock trades about -0.02 of its potential returns per unit of risk. The Mahaka Radio Integra is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 7,500 in Mahaka Radio Integra on August 29, 2024 and sell it today you would lose (2,500) from holding Mahaka Radio Integra or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Mahaka Radio Integra
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Mahaka Radio Integra |
Elang Mahkota and Mahaka Radio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Mahaka Radio
The main advantage of trading using opposite Elang Mahkota and Mahaka Radio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Mahaka Radio 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 Mahaka Radio will offset losses from the drop in Mahaka Radio's long position.| Elang Mahkota vs. Mnc Land Tbk | Elang Mahkota vs. MNC Vision Networks | Elang Mahkota vs. Medikaloka Hermina PT |
| Mahaka Radio vs. Mnc Land Tbk | Mahaka Radio vs. MNC Vision Networks | Mahaka Radio vs. Medikaloka Hermina PT |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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