Correlation Between Era Mandiri and Diamond Citra
Can any of the company-specific risk be diversified away by investing in both Era Mandiri and Diamond Citra 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 Era Mandiri and Diamond Citra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Era Mandiri Cemerlang and Diamond Citra Propertindo, you can compare the effects of market volatilities on Era Mandiri and Diamond Citra 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 Era Mandiri with a short position of Diamond Citra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Era Mandiri and Diamond Citra.
Diversification Opportunities for Era Mandiri and Diamond Citra
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Era and Diamond is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Era Mandiri Cemerlang and Diamond Citra Propertindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Citra Propertindo and Era Mandiri 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 Era Mandiri Cemerlang are associated (or correlated) with Diamond Citra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Citra Propertindo has no effect on the direction of Era Mandiri i.e., Era Mandiri and Diamond Citra go up and down completely randomly.
Pair Corralation between Era Mandiri and Diamond Citra
Assuming the 90 days trading horizon Era Mandiri Cemerlang is expected to under-perform the Diamond Citra. But the stock apears to be less risky and, when comparing its historical volatility, Era Mandiri Cemerlang is 5.72 times less risky than Diamond Citra. The stock trades about -0.64 of its potential returns per unit of risk. The Diamond Citra Propertindo is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Diamond Citra Propertindo on September 4, 2024 and sell it today you would lose (100.00) from holding Diamond Citra Propertindo or give up 12.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Era Mandiri Cemerlang vs. Diamond Citra Propertindo
Performance |
Timeline |
Era Mandiri Cemerlang |
Diamond Citra Propertindo |
Era Mandiri and Diamond Citra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Era Mandiri and Diamond Citra
The main advantage of trading using opposite Era Mandiri and Diamond Citra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Era Mandiri position performs unexpectedly, Diamond Citra 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 Diamond Citra will offset losses from the drop in Diamond Citra's long position.Era Mandiri vs. Dharma Satya Nusantara | Era Mandiri vs. Saratoga Investama Sedaya | Era Mandiri vs. Surya Esa Perkasa | Era Mandiri vs. Elang Mahkota Teknologi |
Diamond Citra vs. Bima Sakti Pertiwi | Diamond Citra vs. Karya Bersama Anugerah | Diamond Citra vs. Pollux Properti Indonesia | Diamond Citra vs. Surya Permata Andalan |
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.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |