Correlation Between Elang Mahkota and Triputra Agro
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Triputra Agro 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 Triputra Agro 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 Triputra Agro Persada, you can compare the effects of market volatilities on Elang Mahkota and Triputra Agro 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 Triputra Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Triputra Agro.
Diversification Opportunities for Elang Mahkota and Triputra Agro
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elang and Triputra is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Triputra Agro Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triputra Agro Persada 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 Triputra Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triputra Agro Persada has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Triputra Agro go up and down completely randomly.
Pair Corralation between Elang Mahkota and Triputra Agro
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to generate 1.82 times more return on investment than Triputra Agro. However, Elang Mahkota is 1.82 times more volatile than Triputra Agro Persada. It trades about 0.14 of its potential returns per unit of risk. Triputra Agro Persada is currently generating about 0.18 per unit of risk. If you would invest 52,500 in Elang Mahkota Teknologi on November 4, 2024 and sell it today you would earn a total of 4,500 from holding Elang Mahkota Teknologi or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Triputra Agro Persada
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Triputra Agro Persada |
Elang Mahkota and Triputra Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Triputra Agro
The main advantage of trading using opposite Elang Mahkota and Triputra Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Triputra Agro 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 Triputra Agro will offset losses from the drop in Triputra Agro'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 |
| Triputra Agro vs. Dharma Satya Nusantara | Triputra Agro vs. Saratoga Investama Sedaya | Triputra Agro vs. Surya Esa Perkasa | Triputra Agro vs. Elang Mahkota Teknologi |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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