Correlation Between Enseval Putra and City Retail
Can any of the company-specific risk be diversified away by investing in both Enseval Putra and City Retail 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 City Retail 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 City Retail Developments, you can compare the effects of market volatilities on Enseval Putra and City Retail 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 City Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enseval Putra and City Retail.
Diversification Opportunities for Enseval Putra and City Retail
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enseval and City is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Enseval Putra Megatrading and City Retail Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Retail Developments 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 City Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Retail Developments has no effect on the direction of Enseval Putra i.e., Enseval Putra and City Retail go up and down completely randomly.
Pair Corralation between Enseval Putra and City Retail
Assuming the 90 days trading horizon Enseval Putra Megatrading is expected to under-perform the City Retail. But the stock apears to be less risky and, when comparing its historical volatility, Enseval Putra Megatrading is 1.43 times less risky than City Retail. The stock trades about -0.13 of its potential returns per unit of risk. The City Retail Developments is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 13,500 in City Retail Developments on August 30, 2024 and sell it today you would earn a total of 0.00 from holding City Retail Developments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enseval Putra Megatrading vs. City Retail Developments
Performance |
| Timeline |
| Enseval Putra Megatrading |
| City Retail Developments |
Enseval Putra and City Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enseval Putra and City Retail
The main advantage of trading using opposite Enseval Putra and City Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enseval Putra position performs unexpectedly, City Retail 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 City Retail will offset losses from the drop in City Retail's long position.| Enseval Putra vs. Merdeka Copper Gold | Enseval Putra vs. Tower Bersama Infrastructure | Enseval Putra vs. Erajaya Swasembada Tbk | Enseval Putra vs. Surya Citra Media |
| City Retail vs. Metropolitan Land Tbk | City Retail vs. Bekasi Fajar Industrial | City Retail vs. Greenwood Sejahtera Tbk | City Retail vs. Metropolitan Kentjana 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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