Correlation Between First Media and Enseval Putra
Can any of the company-specific risk be diversified away by investing in both First Media and Enseval Putra 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 First Media and Enseval Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Media Tbk and Enseval Putra Megatrading, you can compare the effects of market volatilities on First Media and Enseval Putra 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 First Media with a short position of Enseval Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Media and Enseval Putra.
Diversification Opportunities for First Media and Enseval Putra
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Enseval is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding First Media Tbk and Enseval Putra Megatrading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enseval Putra Megatrading and First Media 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 First Media Tbk are associated (or correlated) with Enseval Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enseval Putra Megatrading has no effect on the direction of First Media i.e., First Media and Enseval Putra go up and down completely randomly.
Pair Corralation between First Media and Enseval Putra
Assuming the 90 days trading horizon First Media Tbk is expected to generate 3.8 times more return on investment than Enseval Putra. However, First Media is 3.8 times more volatile than Enseval Putra Megatrading. It trades about 0.07 of its potential returns per unit of risk. Enseval Putra Megatrading is currently generating about 0.0 per unit of risk. If you would invest 7,000 in First Media Tbk on August 28, 2024 and sell it today you would earn a total of 3,000 from holding First Media Tbk or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.49% |
| Values | Daily Returns |
First Media Tbk vs. Enseval Putra Megatrading
Performance |
| Timeline |
| First Media Tbk |
| Enseval Putra Megatrading |
First Media and Enseval Putra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Media and Enseval Putra
The main advantage of trading using opposite First Media and Enseval Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Media position performs unexpectedly, Enseval Putra 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 Enseval Putra will offset losses from the drop in Enseval Putra's long position.| First Media vs. Bekasi Fajar Industrial | First Media vs. Lion Metal Works | First Media vs. Alumindo Light Metal | First Media vs. Ashmore Asset Management |
| Enseval Putra vs. Astra Graphia Tbk | Enseval Putra vs. Hexindo Adiperkasa Tbk | Enseval Putra vs. Lautan Luas Tbk | Enseval Putra vs. Citra Marga Nusaphala |
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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