Correlation Between Erajaya Swasembada and Ever Shine
Can any of the company-specific risk be diversified away by investing in both Erajaya Swasembada and Ever Shine 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 Ever Shine 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 Ever Shine Textile, you can compare the effects of market volatilities on Erajaya Swasembada and Ever Shine 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 Ever Shine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erajaya Swasembada and Ever Shine.
Diversification Opportunities for Erajaya Swasembada and Ever Shine
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Erajaya and Ever is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Erajaya Swasembada Tbk and Ever Shine Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ever Shine Textile 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 Ever Shine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ever Shine Textile has no effect on the direction of Erajaya Swasembada i.e., Erajaya Swasembada and Ever Shine go up and down completely randomly.
Pair Corralation between Erajaya Swasembada and Ever Shine
Assuming the 90 days trading horizon Erajaya Swasembada Tbk is expected to generate 0.71 times more return on investment than Ever Shine. However, Erajaya Swasembada Tbk is 1.41 times less risky than Ever Shine. It trades about -0.14 of its potential returns per unit of risk. Ever Shine Textile is currently generating about -0.12 per unit of risk. If you would invest 44,400 in Erajaya Swasembada Tbk on September 3, 2024 and sell it today you would lose (2,800) from holding Erajaya Swasembada Tbk or give up 6.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erajaya Swasembada Tbk vs. Ever Shine Textile
Performance |
| Timeline |
| Erajaya Swasembada Tbk |
| Ever Shine Textile |
Erajaya Swasembada and Ever Shine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erajaya Swasembada and Ever Shine
The main advantage of trading using opposite Erajaya Swasembada and Ever Shine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erajaya Swasembada position performs unexpectedly, Ever Shine 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 Ever Shine will offset losses from the drop in Ever Shine's long position.| Erajaya Swasembada vs. Astra Graphia Tbk | Erajaya Swasembada vs. Mitra Pinasthika Mustika | Erajaya Swasembada vs. Jakarta Int Hotels | Erajaya Swasembada vs. Asuransi Harta Aman |
| Ever Shine vs. Mitra Pinasthika Mustika | Ever Shine vs. Jakarta Int Hotels | Ever Shine vs. Asuransi Harta Aman | Ever Shine vs. Indosterling Technomedia 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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