Correlation Between Enseval Putra and Fast Food
Can any of the company-specific risk be diversified away by investing in both Enseval Putra and Fast Food 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 Fast Food 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 Fast Food Indonesia, you can compare the effects of market volatilities on Enseval Putra and Fast Food 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 Fast Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enseval Putra and Fast Food.
Diversification Opportunities for Enseval Putra and Fast Food
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enseval and Fast is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Enseval Putra Megatrading and Fast Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Food Indonesia 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 Fast Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Food Indonesia has no effect on the direction of Enseval Putra i.e., Enseval Putra and Fast Food go up and down completely randomly.
Pair Corralation between Enseval Putra and Fast Food
Assuming the 90 days trading horizon Enseval Putra Megatrading is expected to under-perform the Fast Food. But the stock apears to be less risky and, when comparing its historical volatility, Enseval Putra Megatrading is 4.19 times less risky than Fast Food. The stock trades about -0.23 of its potential returns per unit of risk. The Fast Food Indonesia is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 29,200 in Fast Food Indonesia on November 3, 2024 and sell it today you would lose (1,200) from holding Fast Food Indonesia or give up 4.11% 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. Fast Food Indonesia
Performance |
| Timeline |
| Enseval Putra Megatrading |
| Fast Food Indonesia |
Enseval Putra and Fast Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enseval Putra and Fast Food
The main advantage of trading using opposite Enseval Putra and Fast Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enseval Putra position performs unexpectedly, Fast Food 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 Fast Food will offset losses from the drop in Fast Food'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 |
| Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Indoritel Makmur Internasional | Fast Food vs. Enseval Putra Megatrading | Fast Food vs. Fks Multi Agro |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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