Correlation Between PT Soho and Elang Mahkota
Can any of the company-specific risk be diversified away by investing in both PT Soho and Elang Mahkota 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 Soho and Elang Mahkota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Soho Global and Elang Mahkota Teknologi, you can compare the effects of market volatilities on PT Soho and Elang Mahkota 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 Soho with a short position of Elang Mahkota. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Soho and Elang Mahkota.
Diversification Opportunities for PT Soho and Elang Mahkota
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SOHO and Elang is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PT Soho Global and Elang Mahkota Teknologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elang Mahkota Teknologi and PT Soho 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 Soho Global are associated (or correlated) with Elang Mahkota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elang Mahkota Teknologi has no effect on the direction of PT Soho i.e., PT Soho and Elang Mahkota go up and down completely randomly.
Pair Corralation between PT Soho and Elang Mahkota
Assuming the 90 days trading horizon PT Soho Global is expected to generate 17.93 times more return on investment than Elang Mahkota. However, PT Soho is 17.93 times more volatile than Elang Mahkota Teknologi. It trades about 0.05 of its potential returns per unit of risk. Elang Mahkota Teknologi is currently generating about -0.01 per unit of risk. If you would invest 46,745 in PT Soho Global on August 31, 2024 and sell it today you would earn a total of 22,255 from holding PT Soho Global or generate 47.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
PT Soho Global vs. Elang Mahkota Teknologi
Performance |
| Timeline |
| PT Soho Global |
| Elang Mahkota Teknologi |
PT Soho and Elang Mahkota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Soho and Elang Mahkota
The main advantage of trading using opposite PT Soho and Elang Mahkota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Soho position performs unexpectedly, Elang Mahkota 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 Elang Mahkota will offset losses from the drop in Elang Mahkota's long position.| PT Soho vs. Phapros Tbk PT | PT Soho vs. Prodia Widyahusada Tbk | PT Soho vs. Sarana Meditama Metropolitan | PT Soho vs. Metro Healthcare Indonesia |
| Elang Mahkota vs. Indosat Tbk | Elang Mahkota vs. XL Axiata Tbk | Elang Mahkota vs. Energi Mega Persada | Elang Mahkota vs. Bakrie Brothers 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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