Correlation Between Enseval Putra and Hexindo Adiperkasa
Can any of the company-specific risk be diversified away by investing in both Enseval Putra and Hexindo Adiperkasa 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 Enseval Putra and Hexindo Adiperkasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enseval Putra Megatrading and Hexindo Adiperkasa Tbk, you can compare the effects of market volatilities on Enseval Putra and Hexindo Adiperkasa 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 Enseval Putra with a short position of Hexindo Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enseval Putra and Hexindo Adiperkasa.
Diversification Opportunities for Enseval Putra and Hexindo Adiperkasa
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enseval and Hexindo is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Enseval Putra Megatrading and Hexindo Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexindo Adiperkasa Tbk and Enseval Putra 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 Enseval Putra Megatrading are associated (or correlated) with Hexindo Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexindo Adiperkasa Tbk has no effect on the direction of Enseval Putra i.e., Enseval Putra and Hexindo Adiperkasa go up and down completely randomly.
Pair Corralation between Enseval Putra and Hexindo Adiperkasa
Assuming the 90 days trading horizon Enseval Putra Megatrading is expected to generate 1.5 times more return on investment than Hexindo Adiperkasa. However, Enseval Putra is 1.5 times more volatile than Hexindo Adiperkasa Tbk. It trades about 0.05 of its potential returns per unit of risk. Hexindo Adiperkasa Tbk is currently generating about 0.04 per unit of risk. If you would invest 220,676 in Enseval Putra Megatrading on March 8, 2024 and sell it today you would earn a total of 7,324 from holding Enseval Putra Megatrading or generate 3.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Enseval Putra Megatrading vs. Hexindo Adiperkasa Tbk
Performance |
Timeline |
Enseval Putra Megatrading |
Hexindo Adiperkasa Tbk |
Enseval Putra and Hexindo Adiperkasa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enseval Putra and Hexindo Adiperkasa
The main advantage of trading using opposite Enseval Putra and Hexindo Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enseval Putra position performs unexpectedly, Hexindo Adiperkasa 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 Hexindo Adiperkasa will offset losses from the drop in Hexindo Adiperkasa's long position.Enseval Putra vs. Darya Varia Laboratoria Tbk | Enseval Putra vs. Tempo Scan Pacific | Enseval Putra vs. Multi Bintang Indonesia | Enseval Putra vs. Mustika Ratu Tbk |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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