Correlation Between Essentra Plc and PT Gajah
Can any of the company-specific risk be diversified away by investing in both Essentra Plc and PT Gajah 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 Essentra Plc and PT Gajah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Essentra plc and PT Gajah Tunggal, you can compare the effects of market volatilities on Essentra Plc and PT Gajah 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 Essentra Plc with a short position of PT Gajah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essentra Plc and PT Gajah.
Diversification Opportunities for Essentra Plc and PT Gajah
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Essentra and GH8 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Essentra plc and PT Gajah Tunggal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Gajah Tunggal and Essentra Plc 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 Essentra plc are associated (or correlated) with PT Gajah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Gajah Tunggal has no effect on the direction of Essentra Plc i.e., Essentra Plc and PT Gajah go up and down completely randomly.
Pair Corralation between Essentra Plc and PT Gajah
Assuming the 90 days horizon Essentra plc is expected to generate 0.14 times more return on investment than PT Gajah. However, Essentra plc is 7.16 times less risky than PT Gajah. It trades about -0.02 of its potential returns per unit of risk. PT Gajah Tunggal is currently generating about -0.03 per unit of risk. If you would invest 177.00 in Essentra plc on September 1, 2024 and sell it today you would lose (2.00) from holding Essentra plc or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Essentra plc vs. PT Gajah Tunggal
Performance |
| Timeline |
| Essentra plc |
| PT Gajah Tunggal |
Essentra Plc and PT Gajah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essentra Plc and PT Gajah
The main advantage of trading using opposite Essentra Plc and PT Gajah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essentra Plc position performs unexpectedly, PT Gajah 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 PT Gajah will offset losses from the drop in PT Gajah's long position.| Essentra Plc vs. Bridgestone | Essentra Plc vs. The Goodyear Tire | Essentra Plc vs. Sumitomo Rubber Industries | Essentra Plc vs. Zeon Corporation |
| PT Gajah vs. SCANSOURCE | PT Gajah vs. RETAIL FOOD GROUP | PT Gajah vs. AUTO TRADER ADR | PT Gajah vs. GungHo Online Entertainment |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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