Correlation Between Elang Mahkota and Wintermar Offshore
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Wintermar Offshore 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 Wintermar Offshore 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 Wintermar Offshore Marine, you can compare the effects of market volatilities on Elang Mahkota and Wintermar Offshore 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 Wintermar Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Wintermar Offshore.
Diversification Opportunities for Elang Mahkota and Wintermar Offshore
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Elang and Wintermar is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Wintermar Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintermar Offshore Marine 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 Wintermar Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintermar Offshore Marine has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Wintermar Offshore go up and down completely randomly.
Pair Corralation between Elang Mahkota and Wintermar Offshore
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to generate 1.72 times more return on investment than Wintermar Offshore. However, Elang Mahkota is 1.72 times more volatile than Wintermar Offshore Marine. It trades about 0.26 of its potential returns per unit of risk. Wintermar Offshore Marine is currently generating about -0.18 per unit of risk. If you would invest 50,000 in Elang Mahkota Teknologi on September 14, 2024 and sell it today you would earn a total of 10,500 from holding Elang Mahkota Teknologi or generate 21.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Wintermar Offshore Marine
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Wintermar Offshore Marine |
Elang Mahkota and Wintermar Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Wintermar Offshore
The main advantage of trading using opposite Elang Mahkota and Wintermar Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Wintermar Offshore 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 Wintermar Offshore will offset losses from the drop in Wintermar Offshore'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 |
| Wintermar Offshore vs. Harum Energy Tbk | Wintermar Offshore vs. Delta Dunia Makmur | Wintermar Offshore vs. Adi Sarana Armada | Wintermar Offshore 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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