Correlation Between Tempo Inti and Eratex Djaja
Can any of the company-specific risk be diversified away by investing in both Tempo Inti and Eratex Djaja 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 Tempo Inti and Eratex Djaja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tempo Inti Media and Eratex Djaja Tbk, you can compare the effects of market volatilities on Tempo Inti and Eratex Djaja 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 Tempo Inti with a short position of Eratex Djaja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tempo Inti and Eratex Djaja.
Diversification Opportunities for Tempo Inti and Eratex Djaja
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tempo and Eratex is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tempo Inti Media and Eratex Djaja Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eratex Djaja Tbk and Tempo Inti 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 Tempo Inti Media are associated (or correlated) with Eratex Djaja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eratex Djaja Tbk has no effect on the direction of Tempo Inti i.e., Tempo Inti and Eratex Djaja go up and down completely randomly.
Pair Corralation between Tempo Inti and Eratex Djaja
Assuming the 90 days trading horizon Tempo Inti Media is expected to generate 2.92 times more return on investment than Eratex Djaja. However, Tempo Inti is 2.92 times more volatile than Eratex Djaja Tbk. It trades about -0.01 of its potential returns per unit of risk. Eratex Djaja Tbk is currently generating about -0.31 per unit of risk. If you would invest 14,200 in Tempo Inti Media on November 28, 2024 and sell it today you would lose (500.00) from holding Tempo Inti Media or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tempo Inti Media vs. Eratex Djaja Tbk
Performance |
| Timeline |
| Tempo Inti Media |
| Eratex Djaja Tbk |
Tempo Inti and Eratex Djaja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tempo Inti and Eratex Djaja
The main advantage of trading using opposite Tempo Inti and Eratex Djaja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tempo Inti position performs unexpectedly, Eratex Djaja 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 Eratex Djaja will offset losses from the drop in Eratex Djaja's long position.| Tempo Inti vs. Wicaksana Overseas International | Tempo Inti vs. Wahana Pronatural | Tempo Inti vs. Tigaraksa Satria Tbk | Tempo Inti vs. Millennium Pharmacon International |
| Eratex Djaja vs. Ever Shine Textile | Eratex Djaja vs. PT Century Textile | Eratex Djaja vs. Argo Pantes Tbk | Eratex Djaja vs. Primarindo Asia Infrastructure |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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