Correlation Between Sentral Mitra and Emdeki Utama
Can any of the company-specific risk be diversified away by investing in both Sentral Mitra and Emdeki Utama 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 Sentral Mitra and Emdeki Utama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentral Mitra Informatika and Emdeki Utama Tbk, you can compare the effects of market volatilities on Sentral Mitra and Emdeki Utama 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 Sentral Mitra with a short position of Emdeki Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentral Mitra and Emdeki Utama.
Diversification Opportunities for Sentral Mitra and Emdeki Utama
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sentral and Emdeki is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sentral Mitra Informatika and Emdeki Utama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emdeki Utama Tbk and Sentral Mitra 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 Sentral Mitra Informatika are associated (or correlated) with Emdeki Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emdeki Utama Tbk has no effect on the direction of Sentral Mitra i.e., Sentral Mitra and Emdeki Utama go up and down completely randomly.
Pair Corralation between Sentral Mitra and Emdeki Utama
Assuming the 90 days trading horizon Sentral Mitra Informatika is expected to under-perform the Emdeki Utama. In addition to that, Sentral Mitra is 4.17 times more volatile than Emdeki Utama Tbk. It trades about -0.02 of its total potential returns per unit of risk. Emdeki Utama Tbk is currently generating about 0.0 per unit of volatility. If you would invest 17,732 in Emdeki Utama Tbk on August 31, 2024 and sell it today you would lose (132.00) from holding Emdeki Utama Tbk or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentral Mitra Informatika vs. Emdeki Utama Tbk
Performance |
| Timeline |
| Sentral Mitra Informatika |
| Emdeki Utama Tbk |
Sentral Mitra and Emdeki Utama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentral Mitra and Emdeki Utama
The main advantage of trading using opposite Sentral Mitra and Emdeki Utama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentral Mitra position performs unexpectedly, Emdeki Utama 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 Emdeki Utama will offset losses from the drop in Emdeki Utama's long position.| Sentral Mitra vs. PT Dewi Shri | Sentral Mitra vs. Habco Trans Maritima | Sentral Mitra vs. PT Jhonlin Agro | Sentral Mitra vs. Autopedia Sukses Lestari |
| Emdeki Utama vs. Panca Budi Idaman | Emdeki Utama vs. Intanwijaya Internasional Tbk | Emdeki Utama vs. Hartadinata Abadi Tbk | Emdeki Utama vs. Unggul Indah Cahaya |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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