Correlation Between Eratex Djaja and Cottonindo Ariesta
Can any of the company-specific risk be diversified away by investing in both Eratex Djaja and Cottonindo Ariesta 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 Cottonindo Ariesta 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 Cottonindo Ariesta Tbk, you can compare the effects of market volatilities on Eratex Djaja and Cottonindo Ariesta 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 Cottonindo Ariesta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eratex Djaja and Cottonindo Ariesta.
Diversification Opportunities for Eratex Djaja and Cottonindo Ariesta
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eratex and Cottonindo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eratex Djaja Tbk and Cottonindo Ariesta Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cottonindo Ariesta Tbk 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 Cottonindo Ariesta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cottonindo Ariesta Tbk has no effect on the direction of Eratex Djaja i.e., Eratex Djaja and Cottonindo Ariesta go up and down completely randomly.
Pair Corralation between Eratex Djaja and Cottonindo Ariesta
If you would invest 6,200 in Cottonindo Ariesta Tbk on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Cottonindo Ariesta Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Eratex Djaja Tbk vs. Cottonindo Ariesta Tbk
Performance |
| Timeline |
| Eratex Djaja Tbk |
| Cottonindo Ariesta Tbk |
Eratex Djaja and Cottonindo Ariesta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eratex Djaja and Cottonindo Ariesta
The main advantage of trading using opposite Eratex Djaja and Cottonindo Ariesta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eratex Djaja position performs unexpectedly, Cottonindo Ariesta 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 Cottonindo Ariesta will offset losses from the drop in Cottonindo Ariesta's long position.| Eratex Djaja vs. Pembangunan Graha Lestari | Eratex Djaja vs. Pembangunan Jaya Ancol | Eratex Djaja vs. Hotel Sahid Jaya | Eratex Djaja vs. Mitrabara Adiperdana PT |
| Cottonindo Ariesta vs. Putra Rajawali Kencana | Cottonindo Ariesta vs. Karya Bersama Anugerah | Cottonindo Ariesta vs. Era Mandiri Cemerlang | Cottonindo Ariesta vs. Terregra Asia Energy |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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