Correlation Between Erajaya Swasembada and Integra Indocabinet
Can any of the company-specific risk be diversified away by investing in both Erajaya Swasembada and Integra Indocabinet 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 Integra Indocabinet 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 Integra Indocabinet Tbk, you can compare the effects of market volatilities on Erajaya Swasembada and Integra Indocabinet 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 Integra Indocabinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erajaya Swasembada and Integra Indocabinet.
Diversification Opportunities for Erajaya Swasembada and Integra Indocabinet
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Erajaya and Integra is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Erajaya Swasembada Tbk and Integra Indocabinet Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra Indocabinet 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 Integra Indocabinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra Indocabinet Tbk has no effect on the direction of Erajaya Swasembada i.e., Erajaya Swasembada and Integra Indocabinet go up and down completely randomly.
Pair Corralation between Erajaya Swasembada and Integra Indocabinet
Assuming the 90 days trading horizon Erajaya Swasembada Tbk is expected to generate 1.04 times more return on investment than Integra Indocabinet. However, Erajaya Swasembada is 1.04 times more volatile than Integra Indocabinet Tbk. It trades about -0.02 of its potential returns per unit of risk. Integra Indocabinet Tbk is currently generating about -0.21 per unit of risk. If you would invest 43,200 in Erajaya Swasembada Tbk on August 25, 2024 and sell it today you would lose (600.00) from holding Erajaya Swasembada Tbk or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Erajaya Swasembada Tbk vs. Integra Indocabinet Tbk
Performance |
| Timeline |
| Erajaya Swasembada Tbk |
| Integra Indocabinet Tbk |
Erajaya Swasembada and Integra Indocabinet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erajaya Swasembada and Integra Indocabinet
The main advantage of trading using opposite Erajaya Swasembada and Integra Indocabinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erajaya Swasembada position performs unexpectedly, Integra Indocabinet 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 Integra Indocabinet will offset losses from the drop in Integra Indocabinet's 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 |
| Integra Indocabinet vs. Buyung Poetra Sembada | Integra Indocabinet vs. Erajaya Swasembada Tbk | Integra Indocabinet vs. Sariguna Primatirta PT | Integra Indocabinet vs. Puradelta Lestari PT |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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