Correlation Between Enseval Putra and Krakatau Steel
Can any of the company-specific risk be diversified away by investing in both Enseval Putra and Krakatau Steel 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 Krakatau Steel 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 Krakatau Steel Persero, you can compare the effects of market volatilities on Enseval Putra and Krakatau Steel 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 Krakatau Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enseval Putra and Krakatau Steel.
Diversification Opportunities for Enseval Putra and Krakatau Steel
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Enseval and Krakatau is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Enseval Putra Megatrading and Krakatau Steel Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krakatau Steel Persero 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 Krakatau Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krakatau Steel Persero has no effect on the direction of Enseval Putra i.e., Enseval Putra and Krakatau Steel go up and down completely randomly.
Pair Corralation between Enseval Putra and Krakatau Steel
Assuming the 90 days trading horizon Enseval Putra Megatrading is expected to generate 0.37 times more return on investment than Krakatau Steel. However, Enseval Putra Megatrading is 2.68 times less risky than Krakatau Steel. It trades about 0.01 of its potential returns per unit of risk. Krakatau Steel Persero is currently generating about -0.06 per unit of risk. If you would invest 233,581 in Enseval Putra Megatrading on August 29, 2024 and sell it today you would earn a total of 7,419 from holding Enseval Putra Megatrading or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Enseval Putra Megatrading vs. Krakatau Steel Persero
Performance |
| Timeline |
| Enseval Putra Megatrading |
| Krakatau Steel Persero |
Enseval Putra and Krakatau Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enseval Putra and Krakatau Steel
The main advantage of trading using opposite Enseval Putra and Krakatau Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enseval Putra position performs unexpectedly, Krakatau Steel 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 Krakatau Steel will offset losses from the drop in Krakatau Steel'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 |
| Krakatau Steel vs. Timah Persero Tbk | Krakatau Steel vs. Garuda Indonesia Persero | Krakatau Steel vs. Jasa Marga Tbk | Krakatau Steel vs. Semen Indonesia Persero |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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