Correlation Between Satyamitra Kemas and Era Mandiri
Can any of the company-specific risk be diversified away by investing in both Satyamitra Kemas and Era Mandiri 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 Satyamitra Kemas and Era Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satyamitra Kemas Lestari and Era Mandiri Cemerlang, you can compare the effects of market volatilities on Satyamitra Kemas and Era Mandiri 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 Satyamitra Kemas with a short position of Era Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satyamitra Kemas and Era Mandiri.
Diversification Opportunities for Satyamitra Kemas and Era Mandiri
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Satyamitra and Era is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Satyamitra Kemas Lestari and Era Mandiri Cemerlang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Mandiri Cemerlang and Satyamitra Kemas 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 Satyamitra Kemas Lestari are associated (or correlated) with Era Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Mandiri Cemerlang has no effect on the direction of Satyamitra Kemas i.e., Satyamitra Kemas and Era Mandiri go up and down completely randomly.
Pair Corralation between Satyamitra Kemas and Era Mandiri
Assuming the 90 days trading horizon Satyamitra Kemas Lestari is expected to generate 0.92 times more return on investment than Era Mandiri. However, Satyamitra Kemas Lestari is 1.09 times less risky than Era Mandiri. It trades about -0.26 of its potential returns per unit of risk. Era Mandiri Cemerlang is currently generating about -0.47 per unit of risk. If you would invest 18,000 in Satyamitra Kemas Lestari on September 13, 2024 and sell it today you would lose (1,900) from holding Satyamitra Kemas Lestari or give up 10.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Satyamitra Kemas Lestari vs. Era Mandiri Cemerlang
Performance |
| Timeline |
| Satyamitra Kemas Lestari |
| Era Mandiri Cemerlang |
Satyamitra Kemas and Era Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Satyamitra Kemas and Era Mandiri
The main advantage of trading using opposite Satyamitra Kemas and Era Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satyamitra Kemas position performs unexpectedly, Era Mandiri 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 Era Mandiri will offset losses from the drop in Era Mandiri's long position.| Satyamitra Kemas vs. Saraswanti Anugerah Makmur | Satyamitra Kemas vs. Panca Budi Idaman | Satyamitra Kemas vs. Indonesia Fibreboard Industry | Satyamitra Kemas vs. Kencana Energi Lestari |
| Era Mandiri vs. Mahkota Group Tbk | Era Mandiri vs. Palma Serasih PT | Era Mandiri vs. Cisadane Sawit Raya | Era Mandiri vs. Diamond Food 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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