Correlation Between Equity Development and Era Media
Can any of the company-specific risk be diversified away by investing in both Equity Development and Era Media 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 Equity Development and Era Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Development Investment and Era Media Sejahtera, you can compare the effects of market volatilities on Equity Development and Era Media 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 Equity Development with a short position of Era Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Development and Era Media.
Diversification Opportunities for Equity Development and Era Media
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Equity and Era is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Equity Development Investment and Era Media Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Media Sejahtera and Equity Development 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 Equity Development Investment are associated (or correlated) with Era Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Media Sejahtera has no effect on the direction of Equity Development i.e., Equity Development and Era Media go up and down completely randomly.
Pair Corralation between Equity Development and Era Media
Assuming the 90 days trading horizon Equity Development Investment is expected to under-perform the Era Media. But the stock apears to be less risky and, when comparing its historical volatility, Equity Development Investment is 2.16 times less risky than Era Media. The stock trades about -0.02 of its potential returns per unit of risk. The Era Media Sejahtera is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 10,500 in Era Media Sejahtera on August 27, 2024 and sell it today you would lose (5,000) from holding Era Media Sejahtera or give up 47.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.95% |
| Values | Daily Returns |
Equity Development Investment vs. Era Media Sejahtera
Performance |
| Timeline |
| Equity Development |
| Era Media Sejahtera |
Equity Development and Era Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Development and Era Media
The main advantage of trading using opposite Equity Development and Era Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Development position performs unexpectedly, Era Media 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 Era Media will offset losses from the drop in Era Media's long position.| Equity Development vs. Pacific Strategic Financial | Equity Development vs. Asuransi Harta Aman | Equity Development vs. Buana Finance Tbk | Equity Development vs. Asuransi Bintang Tbk |
| Era Media vs. Bank Central Asia | Era Media vs. Bank Rakyat Indonesia | Era Media vs. Bayan Resources Tbk | Era Media vs. Bank Mandiri Persero |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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