Correlation Between Ever Shine and Pembangunan Graha
Can any of the company-specific risk be diversified away by investing in both Ever Shine 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 Ever Shine and Pembangunan Graha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ever Shine Textile and Pembangunan Graha Lestari, you can compare the effects of market volatilities on Ever Shine 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 Ever Shine with a short position of Pembangunan Graha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ever Shine and Pembangunan Graha.
Diversification Opportunities for Ever Shine and Pembangunan Graha
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ever and Pembangunan is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ever Shine Textile 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 Ever Shine 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 Ever Shine Textile 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 Ever Shine i.e., Ever Shine and Pembangunan Graha go up and down completely randomly.
Pair Corralation between Ever Shine and Pembangunan Graha
Assuming the 90 days trading horizon Ever Shine is expected to generate 1.15 times less return on investment than Pembangunan Graha. But when comparing it to its historical volatility, Ever Shine Textile is 1.64 times less risky than Pembangunan Graha. It trades about 0.13 of its potential returns per unit of risk. Pembangunan Graha Lestari is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,300 in Pembangunan Graha Lestari on September 15, 2024 and sell it today you would earn a total of 6,600 from holding Pembangunan Graha Lestari or generate 58.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ever Shine Textile vs. Pembangunan Graha Lestari
Performance |
| Timeline |
| Ever Shine Textile |
| Pembangunan Graha Lestari |
Ever Shine and Pembangunan Graha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ever Shine and Pembangunan Graha
The main advantage of trading using opposite Ever Shine and Pembangunan Graha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ever Shine 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.| Ever Shine vs. Eratex Djaja Tbk | Ever Shine vs. Goodyear Indonesia Tbk | Ever Shine vs. PT Century Textile | Ever Shine vs. Sepatu Bata Tbk |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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