Correlation Between Erajaya Swasembada and Sona Topas
Can any of the company-specific risk be diversified away by investing in both Erajaya Swasembada and Sona Topas 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 Sona Topas 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 Sona Topas Tourism, you can compare the effects of market volatilities on Erajaya Swasembada and Sona Topas 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 Sona Topas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erajaya Swasembada and Sona Topas.
Diversification Opportunities for Erajaya Swasembada and Sona Topas
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Erajaya and Sona is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Erajaya Swasembada Tbk and Sona Topas Tourism in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sona Topas Tourism 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 Sona Topas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sona Topas Tourism has no effect on the direction of Erajaya Swasembada i.e., Erajaya Swasembada and Sona Topas go up and down completely randomly.
Pair Corralation between Erajaya Swasembada and Sona Topas
Assuming the 90 days trading horizon Erajaya Swasembada is expected to generate 146.23 times less return on investment than Sona Topas. But when comparing it to its historical volatility, Erajaya Swasembada Tbk is 15.22 times less risky than Sona Topas. It trades about 0.01 of its potential returns per unit of risk. Sona Topas Tourism is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 155,000 in Sona Topas Tourism on August 31, 2024 and sell it today you would earn a total of 585,000 from holding Sona Topas Tourism or generate 377.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Erajaya Swasembada Tbk vs. Sona Topas Tourism
Performance |
| Timeline |
| Erajaya Swasembada Tbk |
| Sona Topas Tourism |
Erajaya Swasembada and Sona Topas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erajaya Swasembada and Sona Topas
The main advantage of trading using opposite Erajaya Swasembada and Sona Topas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erajaya Swasembada position performs unexpectedly, Sona Topas 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 Sona Topas will offset losses from the drop in Sona Topas' long position.| Erajaya Swasembada vs. Multipolar Tbk | Erajaya Swasembada vs. Astra Graphia Tbk | Erajaya Swasembada vs. Matahari Putra Prima | Erajaya Swasembada vs. Ramayana Lestari Sentosa |
| Sona Topas vs. Japfa Comfeed Indonesia | Sona Topas vs. Charoen Pokphand Indonesia | Sona Topas vs. Erajaya Swasembada Tbk | Sona Topas 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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