Correlation Between Unggul Indah and Emdeki Utama
Can any of the company-specific risk be diversified away by investing in both Unggul Indah and Emdeki Utama 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 Unggul Indah and Emdeki Utama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unggul Indah Cahaya and Emdeki Utama Tbk, you can compare the effects of market volatilities on Unggul Indah and Emdeki Utama 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 Unggul Indah with a short position of Emdeki Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unggul Indah and Emdeki Utama.
Diversification Opportunities for Unggul Indah and Emdeki Utama
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Unggul and Emdeki is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Unggul Indah Cahaya and Emdeki Utama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emdeki Utama Tbk and Unggul Indah 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 Unggul Indah Cahaya are associated (or correlated) with Emdeki Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emdeki Utama Tbk has no effect on the direction of Unggul Indah i.e., Unggul Indah and Emdeki Utama go up and down completely randomly.
Pair Corralation between Unggul Indah and Emdeki Utama
Assuming the 90 days trading horizon Unggul Indah Cahaya is expected to generate 1.65 times more return on investment than Emdeki Utama. However, Unggul Indah is 1.65 times more volatile than Emdeki Utama Tbk. It trades about 0.05 of its potential returns per unit of risk. Emdeki Utama Tbk is currently generating about -0.01 per unit of risk. If you would invest 754,871 in Unggul Indah Cahaya on September 1, 2024 and sell it today you would earn a total of 45,129 from holding Unggul Indah Cahaya or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Unggul Indah Cahaya vs. Emdeki Utama Tbk
Performance |
| Timeline |
| Unggul Indah Cahaya |
| Emdeki Utama Tbk |
Unggul Indah and Emdeki Utama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unggul Indah and Emdeki Utama
The main advantage of trading using opposite Unggul Indah and Emdeki Utama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unggul Indah position performs unexpectedly, Emdeki Utama 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 Emdeki Utama will offset losses from the drop in Emdeki Utama's long position.| Unggul Indah vs. Perusahaan Gas Negara | Unggul Indah vs. Telkom Indonesia Tbk | Unggul Indah vs. Mitra Pinasthika Mustika | Unggul Indah vs. Jakarta Int Hotels |
| Emdeki Utama vs. Panca Budi Idaman | Emdeki Utama vs. Intanwijaya Internasional Tbk | Emdeki Utama vs. Hartadinata Abadi Tbk | Emdeki Utama vs. Unggul Indah Cahaya |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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