Correlation Between Unilever Indonesia and Elnusa Tbk
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Elnusa Tbk 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 Unilever Indonesia and Elnusa Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Indonesia Tbk and Elnusa Tbk, you can compare the effects of market volatilities on Unilever Indonesia and Elnusa Tbk 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 Unilever Indonesia with a short position of Elnusa Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Elnusa Tbk.
Diversification Opportunities for Unilever Indonesia and Elnusa Tbk
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Unilever and Elnusa is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Elnusa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elnusa Tbk and Unilever Indonesia 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 Unilever Indonesia Tbk are associated (or correlated) with Elnusa Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elnusa Tbk has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Elnusa Tbk go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Elnusa Tbk
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to under-perform the Elnusa Tbk. In addition to that, Unilever Indonesia is 1.1 times more volatile than Elnusa Tbk. It trades about -0.17 of its total potential returns per unit of risk. Elnusa Tbk is currently generating about 0.02 per unit of volatility. If you would invest 42,600 in Elnusa Tbk on September 2, 2024 and sell it today you would earn a total of 1,600 from holding Elnusa Tbk or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Elnusa Tbk
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Elnusa Tbk |
Unilever Indonesia and Elnusa Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Elnusa Tbk
The main advantage of trading using opposite Unilever Indonesia and Elnusa Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Elnusa Tbk 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 Elnusa Tbk will offset losses from the drop in Elnusa Tbk's long position.| Unilever Indonesia vs. Bank BRISyariah Tbk | Unilever Indonesia vs. Mitra Pinasthika Mustika | Unilever Indonesia vs. Jakarta Int Hotels | Unilever Indonesia vs. Indosterling Technomedia Tbk |
| Elnusa Tbk vs. Mitrabahtera Segara Sejati | Elnusa Tbk vs. Weha Transportasi Indonesia | Elnusa Tbk vs. Rig Tenders 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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