Correlation Between Fast Food and Enseval Putra
Can any of the company-specific risk be diversified away by investing in both Fast Food and Enseval Putra 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 Fast Food and Enseval Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Food Indonesia and Enseval Putra Megatrading, you can compare the effects of market volatilities on Fast Food and Enseval Putra 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 Fast Food with a short position of Enseval Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Food and Enseval Putra.
Diversification Opportunities for Fast Food and Enseval Putra
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fast and Enseval is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fast Food Indonesia and Enseval Putra Megatrading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enseval Putra Megatrading and Fast Food 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 Fast Food Indonesia are associated (or correlated) with Enseval Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enseval Putra Megatrading has no effect on the direction of Fast Food i.e., Fast Food and Enseval Putra go up and down completely randomly.
Pair Corralation between Fast Food and Enseval Putra
Assuming the 90 days trading horizon Fast Food Indonesia is expected to under-perform the Enseval Putra. In addition to that, Fast Food is 3.17 times more volatile than Enseval Putra Megatrading. It trades about -0.23 of its total potential returns per unit of risk. Enseval Putra Megatrading is currently generating about -0.18 per unit of volatility. If you would invest 240,000 in Enseval Putra Megatrading on November 5, 2024 and sell it today you would lose (9,000) from holding Enseval Putra Megatrading or give up 3.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Food Indonesia vs. Enseval Putra Megatrading
Performance |
| Timeline |
| Fast Food Indonesia |
| Enseval Putra Megatrading |
Fast Food and Enseval Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Food and Enseval Putra
The main advantage of trading using opposite Fast Food and Enseval Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Food position performs unexpectedly, Enseval Putra 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 Enseval Putra will offset losses from the drop in Enseval Putra's long position.| Fast Food vs. Catur Sentosa Adiprana | Fast Food vs. Hero Supermarket Tbk | Fast Food vs. Graha Layar Prima | Fast Food vs. Dyandra Media International |
| Enseval Putra vs. Astra Graphia Tbk | Enseval Putra vs. Hexindo Adiperkasa Tbk | Enseval Putra vs. Lautan Luas Tbk | Enseval Putra vs. Citra Marga Nusaphala |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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