Correlation Between Enseval Putra and Centratama Telekomunikasi
Can any of the company-specific risk be diversified away by investing in both Enseval Putra and Centratama Telekomunikasi 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 Enseval Putra and Centratama Telekomunikasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enseval Putra Megatrading and Centratama Telekomunikasi Ind, you can compare the effects of market volatilities on Enseval Putra and Centratama Telekomunikasi 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 Enseval Putra with a short position of Centratama Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enseval Putra and Centratama Telekomunikasi.
Diversification Opportunities for Enseval Putra and Centratama Telekomunikasi
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Enseval and Centratama is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Enseval Putra Megatrading and Centratama Telekomunikasi Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centratama Telekomunikasi and Enseval Putra 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 Enseval Putra Megatrading are associated (or correlated) with Centratama Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centratama Telekomunikasi has no effect on the direction of Enseval Putra i.e., Enseval Putra and Centratama Telekomunikasi go up and down completely randomly.
Pair Corralation between Enseval Putra and Centratama Telekomunikasi
Assuming the 90 days trading horizon Enseval Putra is expected to generate 6.06 times less return on investment than Centratama Telekomunikasi. But when comparing it to its historical volatility, Enseval Putra Megatrading is 4.51 times less risky than Centratama Telekomunikasi. It trades about 0.05 of its potential returns per unit of risk. Centratama Telekomunikasi Ind is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,800 in Centratama Telekomunikasi Ind on September 1, 2024 and sell it today you would earn a total of 900.00 from holding Centratama Telekomunikasi Ind or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enseval Putra Megatrading vs. Centratama Telekomunikasi Ind
Performance |
| Timeline |
| Enseval Putra Megatrading |
| Centratama Telekomunikasi |
Enseval Putra and Centratama Telekomunikasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enseval Putra and Centratama Telekomunikasi
The main advantage of trading using opposite Enseval Putra and Centratama Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enseval Putra position performs unexpectedly, Centratama Telekomunikasi 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 Centratama Telekomunikasi will offset losses from the drop in Centratama Telekomunikasi's long position.| Enseval Putra vs. Astra Graphia Tbk | Enseval Putra vs. Hexindo Adiperkasa Tbk | Enseval Putra vs. Lautan Luas Tbk | Enseval Putra vs. Citra Marga Nusaphala |
| Centratama Telekomunikasi vs. Indosat Tbk | Centratama Telekomunikasi vs. XL Axiata Tbk | Centratama Telekomunikasi vs. Energi Mega Persada | Centratama Telekomunikasi vs. Bakrie Brothers 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |