Correlation Between Erajaya Swasembada and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Erajaya Swasembada and Asia Pacific 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 Asia Pacific 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 Asia Pacific Investama, you can compare the effects of market volatilities on Erajaya Swasembada and Asia Pacific 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 Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erajaya Swasembada and Asia Pacific.
Diversification Opportunities for Erajaya Swasembada and Asia Pacific
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Erajaya and Asia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Erajaya Swasembada Tbk and Asia Pacific Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Investama 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 Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Investama has no effect on the direction of Erajaya Swasembada i.e., Erajaya Swasembada and Asia Pacific go up and down completely randomly.
Pair Corralation between Erajaya Swasembada and Asia Pacific
Assuming the 90 days trading horizon Erajaya Swasembada Tbk is expected to generate 0.6 times more return on investment than Asia Pacific. However, Erajaya Swasembada Tbk is 1.67 times less risky than Asia Pacific. It trades about -0.16 of its potential returns per unit of risk. Asia Pacific Investama is currently generating about -0.21 per unit of risk. If you would invest 45,000 in Erajaya Swasembada Tbk on September 1, 2024 and sell it today you would lose (3,400) from holding Erajaya Swasembada Tbk or give up 7.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erajaya Swasembada Tbk vs. Asia Pacific Investama
Performance |
| Timeline |
| Erajaya Swasembada Tbk |
| Asia Pacific Investama |
Erajaya Swasembada and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erajaya Swasembada and Asia Pacific
The main advantage of trading using opposite Erajaya Swasembada and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erajaya Swasembada position performs unexpectedly, Asia Pacific 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 Asia Pacific will offset losses from the drop in Asia Pacific'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 |
| Asia Pacific vs. Japfa Comfeed Indonesia | Asia Pacific vs. Charoen Pokphand Indonesia | Asia Pacific vs. Erajaya Swasembada Tbk | Asia Pacific vs. Indofood Cbp Sukses |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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