Correlation Between Enseval Putra and Colorpak Indonesia
Can any of the company-specific risk be diversified away by investing in both Enseval Putra and Colorpak Indonesia 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 Colorpak Indonesia 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 Colorpak Indonesia Tbk, you can compare the effects of market volatilities on Enseval Putra and Colorpak Indonesia 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 Colorpak Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enseval Putra and Colorpak Indonesia.
Diversification Opportunities for Enseval Putra and Colorpak Indonesia
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enseval and Colorpak is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Enseval Putra Megatrading and Colorpak Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colorpak Indonesia Tbk 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 Colorpak Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colorpak Indonesia Tbk has no effect on the direction of Enseval Putra i.e., Enseval Putra and Colorpak Indonesia go up and down completely randomly.
Pair Corralation between Enseval Putra and Colorpak Indonesia
Assuming the 90 days trading horizon Enseval Putra Megatrading is expected to under-perform the Colorpak Indonesia. In addition to that, Enseval Putra is 1.65 times more volatile than Colorpak Indonesia Tbk. It trades about -0.12 of its total potential returns per unit of risk. Colorpak Indonesia Tbk is currently generating about -0.04 per unit of volatility. If you would invest 105,000 in Colorpak Indonesia Tbk on November 9, 2024 and sell it today you would lose (500.00) from holding Colorpak Indonesia Tbk or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enseval Putra Megatrading vs. Colorpak Indonesia Tbk
Performance |
| Timeline |
| Enseval Putra Megatrading |
| Colorpak Indonesia Tbk |
Enseval Putra and Colorpak Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enseval Putra and Colorpak Indonesia
The main advantage of trading using opposite Enseval Putra and Colorpak Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enseval Putra position performs unexpectedly, Colorpak Indonesia 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 Colorpak Indonesia will offset losses from the drop in Colorpak Indonesia'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 |
| Colorpak Indonesia vs. Ekadharma International Tbk | Colorpak Indonesia vs. Enseval Putra Megatrading | Colorpak Indonesia vs. Duta Pertiwi Nusantara | Colorpak Indonesia vs. Wilmar Cahaya 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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