Correlation Between Era Mandiri and Cottonindo Ariesta
Can any of the company-specific risk be diversified away by investing in both Era Mandiri and Cottonindo Ariesta 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 Cottonindo Ariesta 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 Cottonindo Ariesta Tbk, you can compare the effects of market volatilities on Era Mandiri and Cottonindo Ariesta 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 Cottonindo Ariesta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Era Mandiri and Cottonindo Ariesta.
Diversification Opportunities for Era Mandiri and Cottonindo Ariesta
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Era and Cottonindo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Era Mandiri Cemerlang and Cottonindo Ariesta Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cottonindo Ariesta Tbk 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 Cottonindo Ariesta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cottonindo Ariesta Tbk has no effect on the direction of Era Mandiri i.e., Era Mandiri and Cottonindo Ariesta go up and down completely randomly.
Pair Corralation between Era Mandiri and Cottonindo Ariesta
If you would invest 6,200 in Cottonindo Ariesta Tbk on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Cottonindo Ariesta Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Era Mandiri Cemerlang vs. Cottonindo Ariesta Tbk
Performance |
| Timeline |
| Era Mandiri Cemerlang |
| Cottonindo Ariesta Tbk |
Era Mandiri and Cottonindo Ariesta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Era Mandiri and Cottonindo Ariesta
The main advantage of trading using opposite Era Mandiri and Cottonindo Ariesta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Era Mandiri position performs unexpectedly, Cottonindo Ariesta 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 Cottonindo Ariesta will offset losses from the drop in Cottonindo Ariesta's long position.| Era Mandiri vs. Putra Rajawali Kencana | Era Mandiri vs. Sinergi Inti Plastindo | Era Mandiri vs. Karya Bersama Anugerah | Era Mandiri vs. Jasnita Telekomindo Tbk |
| Cottonindo Ariesta vs. Putra Rajawali Kencana | Cottonindo Ariesta vs. Karya Bersama Anugerah | Cottonindo Ariesta vs. Era Mandiri Cemerlang | Cottonindo Ariesta vs. Terregra Asia Energy |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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