Correlation Between Eratex Djaja and Primarindo Asia
Can any of the company-specific risk be diversified away by investing in both Eratex Djaja and Primarindo Asia 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 Eratex Djaja and Primarindo Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eratex Djaja Tbk and Primarindo Asia Infrastructure, you can compare the effects of market volatilities on Eratex Djaja and Primarindo Asia 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 Eratex Djaja with a short position of Primarindo Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eratex Djaja and Primarindo Asia.
Diversification Opportunities for Eratex Djaja and Primarindo Asia
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eratex and Primarindo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eratex Djaja Tbk and Primarindo Asia Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primarindo Asia Infr and Eratex Djaja 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 Eratex Djaja Tbk are associated (or correlated) with Primarindo Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primarindo Asia Infr has no effect on the direction of Eratex Djaja i.e., Eratex Djaja and Primarindo Asia go up and down completely randomly.
Pair Corralation between Eratex Djaja and Primarindo Asia
Assuming the 90 days trading horizon Eratex Djaja Tbk is expected to generate 1.66 times more return on investment than Primarindo Asia. However, Eratex Djaja is 1.66 times more volatile than Primarindo Asia Infrastructure. It trades about 0.0 of its potential returns per unit of risk. Primarindo Asia Infrastructure is currently generating about 0.0 per unit of risk. If you would invest 18,551 in Eratex Djaja Tbk on August 25, 2024 and sell it today you would lose (8,451) from holding Eratex Djaja Tbk or give up 45.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eratex Djaja Tbk vs. Primarindo Asia Infrastructure
Performance |
| Timeline |
| Eratex Djaja Tbk |
| Primarindo Asia Infr |
Eratex Djaja and Primarindo Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eratex Djaja and Primarindo Asia
The main advantage of trading using opposite Eratex Djaja and Primarindo Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eratex Djaja position performs unexpectedly, Primarindo Asia 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 Primarindo Asia will offset losses from the drop in Primarindo Asia's long position.| Eratex Djaja vs. Ever Shine Textile | Eratex Djaja vs. PT Century Textile | Eratex Djaja vs. Argo Pantes Tbk | Eratex Djaja vs. Primarindo Asia Infrastructure |
| Primarindo Asia vs. Sepatu Bata Tbk | Primarindo Asia vs. Ever Shine Textile | Primarindo Asia vs. Argo Pantes Tbk | Primarindo Asia vs. Indo Kordsa 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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