Correlation Between Amanah Leasing and Ekarat Engineering

Can any of the company-specific risk be diversified away by investing in both Amanah Leasing and Ekarat Engineering 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 Amanah Leasing and Ekarat Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amanah Leasing Public and Ekarat Engineering Public, you can compare the effects of market volatilities on Amanah Leasing and Ekarat Engineering 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 Amanah Leasing with a short position of Ekarat Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amanah Leasing and Ekarat Engineering.

Diversification Opportunities for Amanah Leasing and Ekarat Engineering

-0.18

Correlation Coefficient

Amanah Leasing  Ekarat Engineering

Good diversification

The 3 months correlation between Amanah and Ekarat is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Amanah Leasing Public and Ekarat Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekarat Engineering Public and Amanah Leasing 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 Amanah Leasing Public are associated (or correlated) with Ekarat Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekarat Engineering Public has no effect on the direction of Amanah Leasing i.e., Amanah Leasing and Ekarat Engineering go up and down completely randomly.

Pair Corralation between Amanah Leasing and Ekarat Engineering

Assuming the 90 days trading horizon Amanah Leasing is expected to generate 1.04 times less return on investment than Ekarat Engineering. But when comparing it to its historical volatility, Amanah Leasing Public is 1.0 times less risky than Ekarat Engineering. It trades about 0.08 of its potential returns per unit of risk. Ekarat Engineering Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  93.00  in Ekarat Engineering Public on September 25, 2024 and sell it today you would earn a total of  2.00  from holding Ekarat Engineering Public or generate 2.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.18%
Values	Daily Returns

Amanah Leasing Public  vs.  Ekarat Engineering Public

Amanah Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amanah Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ekarat Engineering Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekarat Engineering Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ekarat Engineering is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Amanah Leasing and Ekarat Engineering

The main advantage of trading using opposite Amanah Leasing and Ekarat Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amanah Leasing position performs unexpectedly, Ekarat Engineering 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 Ekarat Engineering will offset losses from the drop in Ekarat Engineering's long position.

The idea behind Amanah Leasing Public and Ekarat Engineering Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.