Correlation Between Elang Mahkota and Sejahteraraya Anugrahjaya
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya Tbk, you can compare the effects of market volatilities on Elang Mahkota and Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Sejahteraraya Anugrahjaya.
Diversification Opportunities for Elang Mahkota and Sejahteraraya Anugrahjaya
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elang and Sejahteraraya is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Sejahteraraya Anugrahjaya Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejahteraraya Anugrahjaya has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Sejahteraraya Anugrahjaya go up and down completely randomly.
Pair Corralation between Elang Mahkota and Sejahteraraya Anugrahjaya
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to generate 1.26 times more return on investment than Sejahteraraya Anugrahjaya. However, Elang Mahkota is 1.26 times more volatile than Sejahteraraya Anugrahjaya Tbk. It trades about 0.0 of its potential returns per unit of risk. Sejahteraraya Anugrahjaya Tbk is currently generating about -0.15 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 (600.00) from holding Elang Mahkota Teknologi or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Sejahteraraya Anugrahjaya Tbk
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Sejahteraraya Anugrahjaya |
Elang Mahkota and Sejahteraraya Anugrahjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Sejahteraraya Anugrahjaya
The main advantage of trading using opposite Elang Mahkota and Sejahteraraya Anugrahjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya will offset losses from the drop in Sejahteraraya Anugrahjaya'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 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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