Correlation Between Era Mandiri and Karya Bersama
Can any of the company-specific risk be diversified away by investing in both Era Mandiri and Karya Bersama 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 Karya Bersama 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 Karya Bersama Anugerah, you can compare the effects of market volatilities on Era Mandiri and Karya Bersama 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 Karya Bersama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Era Mandiri and Karya Bersama.
Diversification Opportunities for Era Mandiri and Karya Bersama
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Era and Karya is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Era Mandiri Cemerlang and Karya Bersama Anugerah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karya Bersama Anugerah 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 Karya Bersama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karya Bersama Anugerah has no effect on the direction of Era Mandiri i.e., Era Mandiri and Karya Bersama go up and down completely randomly.
Pair Corralation between Era Mandiri and Karya Bersama
Assuming the 90 days trading horizon Era Mandiri Cemerlang is expected to generate 1.08 times more return on investment than Karya Bersama. However, Era Mandiri is 1.08 times more volatile than Karya Bersama Anugerah. It trades about -0.03 of its potential returns per unit of risk. Karya Bersama Anugerah is currently generating about -0.05 per unit of risk. If you would invest 6,000 in Era Mandiri Cemerlang on September 4, 2024 and sell it today you would lose (3,400) from holding Era Mandiri Cemerlang or give up 56.67% 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. Karya Bersama Anugerah
Performance |
| Timeline |
| Era Mandiri Cemerlang |
| Karya Bersama Anugerah |
Era Mandiri and Karya Bersama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Era Mandiri and Karya Bersama
The main advantage of trading using opposite Era Mandiri and Karya Bersama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Era Mandiri position performs unexpectedly, Karya Bersama 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 Karya Bersama will offset losses from the drop in Karya Bersama'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 |
| Karya Bersama vs. Putra Rajawali Kencana | Karya Bersama vs. Repower Asia Indonesia | Karya Bersama vs. DMS Propertindo Tbk | Karya Bersama vs. Perintis Triniti Properti |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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