Correlation Between Emdeki Utama and Mark Dynamics
Can any of the company-specific risk be diversified away by investing in both Emdeki Utama and Mark Dynamics 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 Emdeki Utama and Mark Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emdeki Utama Tbk and Mark Dynamics Indonesia, you can compare the effects of market volatilities on Emdeki Utama and Mark Dynamics 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 Emdeki Utama with a short position of Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emdeki Utama and Mark Dynamics.
Diversification Opportunities for Emdeki Utama and Mark Dynamics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emdeki and Mark is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Emdeki Utama Tbk and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics Indonesia and Emdeki Utama 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 Emdeki Utama Tbk are associated (or correlated) with Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Emdeki Utama i.e., Emdeki Utama and Mark Dynamics go up and down completely randomly.
Pair Corralation between Emdeki Utama and Mark Dynamics
Assuming the 90 days trading horizon Emdeki Utama Tbk is expected to under-perform the Mark Dynamics. But the stock apears to be less risky and, when comparing its historical volatility, Emdeki Utama Tbk is 2.99 times less risky than Mark Dynamics. The stock trades about -0.03 of its potential returns per unit of risk. The Mark Dynamics Indonesia is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 59,407 in Mark Dynamics Indonesia on January 19, 2025 and sell it today you would earn a total of 25,593 from holding Mark Dynamics Indonesia or generate 43.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emdeki Utama Tbk vs. Mark Dynamics Indonesia
Performance |
| Timeline |
| Emdeki Utama Tbk |
| Mark Dynamics Indonesia |
Emdeki Utama and Mark Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emdeki Utama and Mark Dynamics
The main advantage of trading using opposite Emdeki Utama and Mark Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emdeki Utama position performs unexpectedly, Mark Dynamics 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 Mark Dynamics will offset losses from the drop in Mark Dynamics' long position.| Emdeki Utama vs. Panca Budi Idaman | Emdeki Utama vs. Intanwijaya Internasional Tbk | Emdeki Utama vs. Hartadinata Abadi Tbk | Emdeki Utama vs. Unggul Indah Cahaya |
| Mark Dynamics vs. Prodia Widyahusada Tbk | Mark Dynamics vs. Panca Budi Idaman | Mark Dynamics vs. Medikaloka Hermina PT | Mark Dynamics vs. Arwana Citramulia 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |