Correlation Between Eratex Djaja and Sejahtera Bintang
Can any of the company-specific risk be diversified away by investing in both Eratex Djaja and Sejahtera Bintang 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 Sejahtera Bintang 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 Sejahtera Bintang Abadi, you can compare the effects of market volatilities on Eratex Djaja and Sejahtera Bintang 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 Sejahtera Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eratex Djaja and Sejahtera Bintang.
Diversification Opportunities for Eratex Djaja and Sejahtera Bintang
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eratex and Sejahtera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eratex Djaja Tbk and Sejahtera Bintang Abadi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejahtera Bintang Abadi 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 Sejahtera Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejahtera Bintang Abadi has no effect on the direction of Eratex Djaja i.e., Eratex Djaja and Sejahtera Bintang go up and down completely randomly.
Pair Corralation between Eratex Djaja and Sejahtera Bintang
Assuming the 90 days trading horizon Eratex Djaja Tbk is expected to under-perform the Sejahtera Bintang. But the stock apears to be less risky and, when comparing its historical volatility, Eratex Djaja Tbk is 3.16 times less risky than Sejahtera Bintang. The stock trades about -0.01 of its potential returns per unit of risk. The Sejahtera Bintang Abadi is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Sejahtera Bintang Abadi on September 3, 2024 and sell it today you would lose (4,900) from holding Sejahtera Bintang Abadi or give up 98.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Eratex Djaja Tbk vs. Sejahtera Bintang Abadi
Performance |
| Timeline |
| Eratex Djaja Tbk |
| Sejahtera Bintang Abadi |
Eratex Djaja and Sejahtera Bintang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eratex Djaja and Sejahtera Bintang
The main advantage of trading using opposite Eratex Djaja and Sejahtera Bintang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eratex Djaja position performs unexpectedly, Sejahtera Bintang 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 Sejahtera Bintang will offset losses from the drop in Sejahtera Bintang'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 |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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