Correlation Between Elang Mahkota and Sumber Global
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Sumber Global 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 Sumber Global 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 Sumber Global Energy, you can compare the effects of market volatilities on Elang Mahkota and Sumber Global 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 Sumber Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Sumber Global.
Diversification Opportunities for Elang Mahkota and Sumber Global
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elang and Sumber is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Sumber Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Global Energy 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 Sumber Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Global Energy has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Sumber Global go up and down completely randomly.
Pair Corralation between Elang Mahkota and Sumber Global
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to generate 1.46 times more return on investment than Sumber Global. However, Elang Mahkota is 1.46 times more volatile than Sumber Global Energy. It trades about -0.03 of its potential returns per unit of risk. Sumber Global Energy is currently generating about -0.14 per unit of risk. If you would invest 49,600 in Elang Mahkota Teknologi on August 30, 2024 and sell it today you would lose (1,400) from holding Elang Mahkota Teknologi or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Sumber Global Energy
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Sumber Global Energy |
Elang Mahkota and Sumber Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Sumber Global
The main advantage of trading using opposite Elang Mahkota and Sumber Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Sumber Global 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 Sumber Global will offset losses from the drop in Sumber Global'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 |
| Sumber Global vs. Golden Eagle Energy | Sumber Global vs. Baramulti Suksessarana Tbk | Sumber Global vs. TBS Energi Utama | Sumber Global vs. Resource Alam Indonesia |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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