Correlation Between Karya Bersama and Era Mandiri
Can any of the company-specific risk be diversified away by investing in both Karya Bersama and Era Mandiri 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 Karya Bersama and Era Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karya Bersama Anugerah and Era Mandiri Cemerlang, you can compare the effects of market volatilities on Karya Bersama and Era Mandiri 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 Karya Bersama with a short position of Era Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karya Bersama and Era Mandiri.
Diversification Opportunities for Karya Bersama and Era Mandiri
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Karya and Era is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Karya Bersama Anugerah and Era Mandiri Cemerlang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Mandiri Cemerlang and Karya Bersama 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 Karya Bersama Anugerah are associated (or correlated) with Era Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Mandiri Cemerlang has no effect on the direction of Karya Bersama i.e., Karya Bersama and Era Mandiri go up and down completely randomly.
Pair Corralation between Karya Bersama and Era Mandiri
Assuming the 90 days trading horizon Karya Bersama Anugerah is expected to under-perform the Era Mandiri. But the stock apears to be less risky and, when comparing its historical volatility, Karya Bersama Anugerah is 1.75 times less risky than Era Mandiri. The stock trades about -0.07 of its potential returns per unit of risk. The Era Mandiri Cemerlang is currently generating about 1.0 of returns per unit of risk over similar time horizon. If you would invest 3,400 in Era Mandiri Cemerlang on November 27, 2024 and sell it today you would earn a total of 6,200 from holding Era Mandiri Cemerlang or generate 182.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karya Bersama Anugerah vs. Era Mandiri Cemerlang
Performance |
| Timeline |
| Karya Bersama Anugerah |
| Era Mandiri Cemerlang |
Karya Bersama and Era Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karya Bersama and Era Mandiri
The main advantage of trading using opposite Karya Bersama and Era Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karya Bersama position performs unexpectedly, Era Mandiri 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 Mandiri will offset losses from the drop in Era Mandiri's long position.| Karya Bersama vs. Putra Rajawali Kencana | Karya Bersama vs. Repower Asia Indonesia | Karya Bersama vs. DMS Propertindo Tbk | Karya Bersama vs. Perintis Triniti Properti |
| Era Mandiri vs. Putra Rajawali Kencana | Era Mandiri vs. Sinergi Inti Plastindo | Era Mandiri vs. Karya Bersama Anugerah | Era Mandiri vs. Jasnita Telekomindo Tbk |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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