Correlation Between Elang Mahkota and Modern Internasional
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Modern Internasional 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 Modern Internasional 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 Modern Internasional Tbk, you can compare the effects of market volatilities on Elang Mahkota and Modern Internasional 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 Modern Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Modern Internasional.
Diversification Opportunities for Elang Mahkota and Modern Internasional
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elang and Modern is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Modern Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modern Internasional Tbk 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 Modern Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modern Internasional Tbk has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Modern Internasional go up and down completely randomly.
Pair Corralation between Elang Mahkota and Modern Internasional
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to generate 0.41 times more return on investment than Modern Internasional. However, Elang Mahkota Teknologi is 2.46 times less risky than Modern Internasional. It trades about -0.02 of its potential returns per unit of risk. Modern Internasional Tbk is currently generating about -0.02 per unit of risk. If you would invest 102,218 in Elang Mahkota Teknologi on September 12, 2024 and sell it today you would lose (40,718) from holding Elang Mahkota Teknologi or give up 39.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Modern Internasional Tbk
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Modern Internasional Tbk |
Elang Mahkota and Modern Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Modern Internasional
The main advantage of trading using opposite Elang Mahkota and Modern Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Modern Internasional 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 Modern Internasional will offset losses from the drop in Modern Internasional's long position.| Elang Mahkota vs. Mnc Land Tbk | Elang Mahkota vs. MNC Vision Networks | Elang Mahkota vs. MD Pictures Tbk | Elang Mahkota vs. Link Net 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Transaction History View history of all your transactions and understand their impact on performance |