Correlation Between PT Techno9 and Erajaya Swasembada
Can any of the company-specific risk be diversified away by investing in both PT Techno9 and Erajaya Swasembada 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 PT Techno9 and Erajaya Swasembada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Techno9 Indonesia and Erajaya Swasembada Tbk, you can compare the effects of market volatilities on PT Techno9 and Erajaya Swasembada 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 PT Techno9 with a short position of Erajaya Swasembada. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Techno9 and Erajaya Swasembada.
Diversification Opportunities for PT Techno9 and Erajaya Swasembada
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between NINE and Erajaya is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding PT Techno9 Indonesia and Erajaya Swasembada Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erajaya Swasembada Tbk and PT Techno9 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 PT Techno9 Indonesia are associated (or correlated) with Erajaya Swasembada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erajaya Swasembada Tbk has no effect on the direction of PT Techno9 i.e., PT Techno9 and Erajaya Swasembada go up and down completely randomly.
Pair Corralation between PT Techno9 and Erajaya Swasembada
Assuming the 90 days trading horizon PT Techno9 Indonesia is expected to generate 2.65 times more return on investment than Erajaya Swasembada. However, PT Techno9 is 2.65 times more volatile than Erajaya Swasembada Tbk. It trades about 0.08 of its potential returns per unit of risk. Erajaya Swasembada Tbk is currently generating about 0.01 per unit of risk. If you would invest 3,300 in PT Techno9 Indonesia on January 17, 2025 and sell it today you would earn a total of 10,400 from holding PT Techno9 Indonesia or generate 315.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Techno9 Indonesia vs. Erajaya Swasembada Tbk
Performance |
| Timeline |
| PT Techno9 Indonesia |
| Erajaya Swasembada Tbk |
PT Techno9 and Erajaya Swasembada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Techno9 and Erajaya Swasembada
The main advantage of trading using opposite PT Techno9 and Erajaya Swasembada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Techno9 position performs unexpectedly, Erajaya Swasembada 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 Erajaya Swasembada will offset losses from the drop in Erajaya Swasembada's long position.| PT Techno9 vs. PT Carsurin Tbk | PT Techno9 vs. Optima Prima Metal | PT Techno9 vs. Kedawung Setia Industrial | PT Techno9 vs. Prima Alloy Steel |
| Erajaya Swasembada vs. Ace Hardware Indonesia | Erajaya Swasembada vs. Japfa Comfeed Indonesia | Erajaya Swasembada vs. XL Axiata Tbk | Erajaya Swasembada vs. Pembangunan Perumahan PT |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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