Correlation Between Erajaya Swasembada and Mitra Pinasthika
Can any of the company-specific risk be diversified away by investing in both Erajaya Swasembada and Mitra Pinasthika 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 Mitra Pinasthika 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 Mitra Pinasthika Mustika, you can compare the effects of market volatilities on Erajaya Swasembada and Mitra Pinasthika 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 Mitra Pinasthika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erajaya Swasembada and Mitra Pinasthika.
Diversification Opportunities for Erajaya Swasembada and Mitra Pinasthika
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Erajaya and Mitra is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Erajaya Swasembada Tbk and Mitra Pinasthika Mustika in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitra Pinasthika Mustika 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 Mitra Pinasthika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitra Pinasthika Mustika has no effect on the direction of Erajaya Swasembada i.e., Erajaya Swasembada and Mitra Pinasthika go up and down completely randomly.
Pair Corralation between Erajaya Swasembada and Mitra Pinasthika
Assuming the 90 days trading horizon Erajaya Swasembada Tbk is expected to generate 4.36 times more return on investment than Mitra Pinasthika. However, Erajaya Swasembada is 4.36 times more volatile than Mitra Pinasthika Mustika. It trades about -0.05 of its potential returns per unit of risk. Mitra Pinasthika Mustika is currently generating about -0.22 per unit of risk. If you would invest 43,800 in Erajaya Swasembada Tbk on August 28, 2024 and sell it today you would lose (1,200) from holding Erajaya Swasembada Tbk or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erajaya Swasembada Tbk vs. Mitra Pinasthika Mustika
Performance |
| Timeline |
| Erajaya Swasembada Tbk |
| Mitra Pinasthika Mustika |
Erajaya Swasembada and Mitra Pinasthika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erajaya Swasembada and Mitra Pinasthika
The main advantage of trading using opposite Erajaya Swasembada and Mitra Pinasthika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erajaya Swasembada position performs unexpectedly, Mitra Pinasthika 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 Mitra Pinasthika will offset losses from the drop in Mitra Pinasthika'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 |
| Mitra Pinasthika vs. Saratoga Investama Sedaya | Mitra Pinasthika vs. Puradelta Lestari PT | Mitra Pinasthika vs. Cikarang Listrindo Tbk | Mitra Pinasthika vs. Erajaya Swasembada 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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