Correlation Between Emdeki Utama and Nusantara Almazia
Can any of the company-specific risk be diversified away by investing in both Emdeki Utama and Nusantara Almazia 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 Nusantara Almazia 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 Nusantara Almazia, you can compare the effects of market volatilities on Emdeki Utama and Nusantara Almazia 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 Nusantara Almazia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emdeki Utama and Nusantara Almazia.
Diversification Opportunities for Emdeki Utama and Nusantara Almazia
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emdeki and Nusantara is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Emdeki Utama Tbk and Nusantara Almazia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Almazia 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 Nusantara Almazia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusantara Almazia has no effect on the direction of Emdeki Utama i.e., Emdeki Utama and Nusantara Almazia go up and down completely randomly.
Pair Corralation between Emdeki Utama and Nusantara Almazia
Assuming the 90 days trading horizon Emdeki Utama Tbk is expected to generate 0.16 times more return on investment than Nusantara Almazia. However, Emdeki Utama Tbk is 6.06 times less risky than Nusantara Almazia. It trades about 0.0 of its potential returns per unit of risk. Nusantara Almazia is currently generating about -0.04 per unit of risk. 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 | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Emdeki Utama Tbk vs. Nusantara Almazia
Performance |
| Timeline |
| Emdeki Utama Tbk |
| Nusantara Almazia |
Emdeki Utama and Nusantara Almazia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emdeki Utama and Nusantara Almazia
The main advantage of trading using opposite Emdeki Utama and Nusantara Almazia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emdeki Utama position performs unexpectedly, Nusantara Almazia 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 Nusantara Almazia will offset losses from the drop in Nusantara Almazia's 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 |
| Nusantara Almazia vs. Bima Sakti Pertiwi | Nusantara Almazia vs. DMS Propertindo Tbk | Nusantara Almazia vs. Repower Asia Indonesia | Nusantara Almazia vs. Pollux Properti Indonesia |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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