Correlation Between Emdeki Utama and Obm Drilchem
Can any of the company-specific risk be diversified away by investing in both Emdeki Utama and Obm Drilchem 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 Obm Drilchem 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 Obm Drilchem PT, you can compare the effects of market volatilities on Emdeki Utama and Obm Drilchem 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 Obm Drilchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emdeki Utama and Obm Drilchem.
Diversification Opportunities for Emdeki Utama and Obm Drilchem
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emdeki and Obm is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Emdeki Utama Tbk and Obm Drilchem PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obm Drilchem PT 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 Obm Drilchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obm Drilchem PT has no effect on the direction of Emdeki Utama i.e., Emdeki Utama and Obm Drilchem go up and down completely randomly.
Pair Corralation between Emdeki Utama and Obm Drilchem
Assuming the 90 days trading horizon Emdeki Utama is expected to generate 63.57 times less return on investment than Obm Drilchem. But when comparing it to its historical volatility, Emdeki Utama Tbk is 3.2 times less risky than Obm Drilchem. It trades about 0.0 of its potential returns per unit of risk. Obm Drilchem PT is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 17,700 in Obm Drilchem PT on August 31, 2024 and sell it today you would earn a total of 3,700 from holding Obm Drilchem PT or generate 20.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Emdeki Utama Tbk vs. Obm Drilchem PT
Performance |
| Timeline |
| Emdeki Utama Tbk |
| Obm Drilchem PT |
Emdeki Utama and Obm Drilchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emdeki Utama and Obm Drilchem
The main advantage of trading using opposite Emdeki Utama and Obm Drilchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emdeki Utama position performs unexpectedly, Obm Drilchem 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 Obm Drilchem will offset losses from the drop in Obm Drilchem'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 |
| Obm Drilchem vs. RMK Energy PT | Obm Drilchem vs. PT Hasnur Internasional | Obm Drilchem vs. Surya Biru Murni | Obm Drilchem vs. PAM Mineral 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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