Correlation Between Erajaya Swasembada and Arthavest Tbk
Can any of the company-specific risk be diversified away by investing in both Erajaya Swasembada and Arthavest Tbk 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 Erajaya Swasembada and Arthavest Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erajaya Swasembada Tbk and Arthavest Tbk, you can compare the effects of market volatilities on Erajaya Swasembada and Arthavest Tbk 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 Erajaya Swasembada with a short position of Arthavest Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erajaya Swasembada and Arthavest Tbk.
Diversification Opportunities for Erajaya Swasembada and Arthavest Tbk
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Erajaya and Arthavest is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Erajaya Swasembada Tbk and Arthavest Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthavest Tbk and Erajaya Swasembada 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 Erajaya Swasembada Tbk are associated (or correlated) with Arthavest Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthavest Tbk has no effect on the direction of Erajaya Swasembada i.e., Erajaya Swasembada and Arthavest Tbk go up and down completely randomly.
Pair Corralation between Erajaya Swasembada and Arthavest Tbk
Assuming the 90 days trading horizon Erajaya Swasembada Tbk is expected to generate 1.79 times more return on investment than Arthavest Tbk. However, Erajaya Swasembada is 1.79 times more volatile than Arthavest Tbk. It trades about 0.03 of its potential returns per unit of risk. Arthavest Tbk is currently generating about -0.05 per unit of risk. If you would invest 39,031 in Erajaya Swasembada Tbk on September 2, 2024 and sell it today you would earn a total of 2,569 from holding Erajaya Swasembada Tbk or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erajaya Swasembada Tbk vs. Arthavest Tbk
Performance |
| Timeline |
| Erajaya Swasembada Tbk |
| Arthavest Tbk |
Erajaya Swasembada and Arthavest Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erajaya Swasembada and Arthavest Tbk
The main advantage of trading using opposite Erajaya Swasembada and Arthavest Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erajaya Swasembada position performs unexpectedly, Arthavest Tbk 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 Arthavest Tbk will offset losses from the drop in Arthavest Tbk's long position.| Erajaya Swasembada vs. Ace Hardware Indonesia | Erajaya Swasembada vs. Japfa Comfeed Indonesia | Erajaya Swasembada vs. XL Axiata Tbk | Erajaya Swasembada vs. Pembangunan Perumahan PT |
| Arthavest Tbk vs. Asuransi Bintang Tbk | Arthavest Tbk vs. Pacific Strategic Financial | Arthavest Tbk vs. Maming Enam Sembilan | Arthavest Tbk vs. Asuransi Harta Aman |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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