Correlation Between Eratex Djaja and Pembangunan Graha
Can any of the company-specific risk be diversified away by investing in both Eratex Djaja and Pembangunan Graha 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 Pembangunan Graha 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 Pembangunan Graha Lestari, you can compare the effects of market volatilities on Eratex Djaja and Pembangunan Graha 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 Pembangunan Graha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eratex Djaja and Pembangunan Graha.
Diversification Opportunities for Eratex Djaja and Pembangunan Graha
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eratex and Pembangunan is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eratex Djaja Tbk and Pembangunan Graha Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembangunan Graha Lestari 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 Pembangunan Graha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembangunan Graha Lestari has no effect on the direction of Eratex Djaja i.e., Eratex Djaja and Pembangunan Graha go up and down completely randomly.
Pair Corralation between Eratex Djaja and Pembangunan Graha
Assuming the 90 days trading horizon Eratex Djaja Tbk is expected to generate 0.86 times more return on investment than Pembangunan Graha. However, Eratex Djaja Tbk is 1.16 times less risky than Pembangunan Graha. It trades about -0.02 of its potential returns per unit of risk. Pembangunan Graha Lestari is currently generating about -0.16 per unit of risk. If you would invest 10,500 in Eratex Djaja Tbk on September 18, 2024 and sell it today you would lose (200.00) from holding Eratex Djaja Tbk or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eratex Djaja Tbk vs. Pembangunan Graha Lestari
Performance |
| Timeline |
| Eratex Djaja Tbk |
| Pembangunan Graha Lestari |
Eratex Djaja and Pembangunan Graha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eratex Djaja and Pembangunan Graha
The main advantage of trading using opposite Eratex Djaja and Pembangunan Graha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eratex Djaja position performs unexpectedly, Pembangunan Graha 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 Pembangunan Graha will offset losses from the drop in Pembangunan Graha'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 |
| Pembangunan Graha vs. Red Planet Indonesia | Pembangunan Graha vs. Pudjiadi Sons Tbk | Pembangunan Graha vs. Pembangunan Jaya Ancol | Pembangunan Graha vs. Pioneerindo Gourmet International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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