Correlation Between Enseval Putra and Gema Grahasarana
Can any of the company-specific risk be diversified away by investing in both Enseval Putra and Gema Grahasarana 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 Gema Grahasarana 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 Gema Grahasarana Tbk, you can compare the effects of market volatilities on Enseval Putra and Gema Grahasarana 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 Gema Grahasarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enseval Putra and Gema Grahasarana.
Diversification Opportunities for Enseval Putra and Gema Grahasarana
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enseval and Gema is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Enseval Putra Megatrading and Gema Grahasarana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gema Grahasarana 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 Gema Grahasarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gema Grahasarana Tbk has no effect on the direction of Enseval Putra i.e., Enseval Putra and Gema Grahasarana go up and down completely randomly.
Pair Corralation between Enseval Putra and Gema Grahasarana
Assuming the 90 days trading horizon Enseval Putra Megatrading is expected to generate 0.16 times more return on investment than Gema Grahasarana. However, Enseval Putra Megatrading is 6.25 times less risky than Gema Grahasarana. It trades about -0.07 of its potential returns per unit of risk. Gema Grahasarana Tbk is currently generating about -0.04 per unit of risk. If you would invest 248,000 in Enseval Putra Megatrading on August 29, 2024 and sell it today you would lose (7,000) from holding Enseval Putra Megatrading or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enseval Putra Megatrading vs. Gema Grahasarana Tbk
Performance |
| Timeline |
| Enseval Putra Megatrading |
| Gema Grahasarana Tbk |
Enseval Putra and Gema Grahasarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enseval Putra and Gema Grahasarana
The main advantage of trading using opposite Enseval Putra and Gema Grahasarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enseval Putra position performs unexpectedly, Gema Grahasarana 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 Gema Grahasarana will offset losses from the drop in Gema Grahasarana'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 |
| Gema Grahasarana vs. Fortune Indonesia Tbk | Gema Grahasarana vs. Fks Multi Agro | Gema Grahasarana vs. Bayu Buana Tbk | Gema Grahasarana vs. Fast Food 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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