Correlation Between Visa and Elang Mahkota
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Elang Mahkota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Elang Mahkota Teknologi, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Elang Mahkota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Elang Mahkota.
Diversification Opportunities for Visa and Elang Mahkota
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Elang is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Elang Mahkota go up and down completely randomly.
Pair Corralation between Visa and Elang Mahkota
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.34 times more return on investment than Elang Mahkota. However, Visa Class A is 2.97 times less risky than Elang Mahkota. It trades about 0.1 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 22,047 in Visa Class A on August 31, 2024 and sell it today you would earn a total of 9,461 from holding Visa Class A or generate 42.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.72% |
| Values | Daily Returns |
Visa Class A vs. Elang Mahkota Teknologi
Performance |
| Timeline |
| Visa Class A |
| Elang Mahkota Teknologi |
Visa and Elang Mahkota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Elang Mahkota
The main advantage of trading using opposite Visa and Elang Mahkota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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