Correlation Between XL Axiata and Elang Mahkota
Can any of the company-specific risk be diversified away by investing in both XL Axiata and Elang Mahkota 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 XL Axiata and Elang Mahkota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XL Axiata Tbk and Elang Mahkota Teknologi, you can compare the effects of market volatilities on XL Axiata and Elang Mahkota 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 XL Axiata with a short position of Elang Mahkota. Check out your portfolio center. Please also check ongoing floating volatility patterns of XL Axiata and Elang Mahkota.
Diversification Opportunities for XL Axiata and Elang Mahkota
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EXCL and Elang is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding XL Axiata Tbk and Elang Mahkota Teknologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elang Mahkota Teknologi and XL Axiata 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 XL Axiata Tbk are associated (or correlated) with Elang Mahkota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elang Mahkota Teknologi has no effect on the direction of XL Axiata i.e., XL Axiata and Elang Mahkota go up and down completely randomly.
Pair Corralation between XL Axiata and Elang Mahkota
Assuming the 90 days trading horizon XL Axiata Tbk is expected to under-perform the Elang Mahkota. But the stock apears to be less risky and, when comparing its historical volatility, XL Axiata Tbk is 2.5 times less risky than Elang Mahkota. The stock trades about -0.05 of its potential returns per unit of risk. The Elang Mahkota Teknologi is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 48,400 in Elang Mahkota Teknologi on September 2, 2024 and sell it today you would earn a total of 200.00 from holding Elang Mahkota Teknologi or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XL Axiata Tbk vs. Elang Mahkota Teknologi
Performance |
| Timeline |
| XL Axiata Tbk |
| Elang Mahkota Teknologi |
XL Axiata and Elang Mahkota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XL Axiata and Elang Mahkota
The main advantage of trading using opposite XL Axiata and Elang Mahkota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XL Axiata position performs unexpectedly, Elang Mahkota 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 Elang Mahkota will offset losses from the drop in Elang Mahkota's long position.| XL Axiata vs. Indosat Tbk | XL Axiata vs. Jasa Marga Tbk | XL Axiata vs. Indocement Tunggal Prakarsa | XL Axiata vs. Semen Indonesia Persero |
| Elang Mahkota vs. Indosat Tbk | Elang Mahkota vs. XL Axiata Tbk | Elang Mahkota vs. Energi Mega Persada | Elang Mahkota vs. Bakrie Brothers 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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