Correlation Between Andalan Sakti and Era Mandiri
Can any of the company-specific risk be diversified away by investing in both Andalan Sakti and Era Mandiri 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 Andalan Sakti and Era Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andalan Sakti Primaindo and Era Mandiri Cemerlang, you can compare the effects of market volatilities on Andalan Sakti and Era Mandiri 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 Andalan Sakti with a short position of Era Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andalan Sakti and Era Mandiri.
Diversification Opportunities for Andalan Sakti and Era Mandiri
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Andalan and Era is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Andalan Sakti Primaindo and Era Mandiri Cemerlang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Mandiri Cemerlang and Andalan Sakti 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 Andalan Sakti Primaindo are associated (or correlated) with Era Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Mandiri Cemerlang has no effect on the direction of Andalan Sakti i.e., Andalan Sakti and Era Mandiri go up and down completely randomly.
Pair Corralation between Andalan Sakti and Era Mandiri
Assuming the 90 days trading horizon Andalan Sakti Primaindo is expected to under-perform the Era Mandiri. But the stock apears to be less risky and, when comparing its historical volatility, Andalan Sakti Primaindo is 1.61 times less risky than Era Mandiri. The stock trades about -0.08 of its potential returns per unit of risk. The Era Mandiri Cemerlang is currently generating about 0.72 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Era Mandiri Cemerlang on December 2, 2024 and sell it today you would earn a total of 9,000 from holding Era Mandiri Cemerlang or generate 360.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 97.5% |
Values | Daily Returns |
Andalan Sakti Primaindo vs. Era Mandiri Cemerlang
Performance |
Timeline |
Andalan Sakti Primaindo |
Era Mandiri Cemerlang |
Andalan Sakti and Era Mandiri Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Andalan Sakti and Era Mandiri
The main advantage of trading using opposite Andalan Sakti and Era Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andalan Sakti position performs unexpectedly, Era Mandiri 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 Era Mandiri will offset losses from the drop in Era Mandiri's long position.Andalan Sakti vs. Bumi Benowo Sukses | Andalan Sakti vs. Makmur Berkah Amanda | Andalan Sakti vs. Royalindo Investa Wijaya | Andalan Sakti vs. Cahayaputra Asa Keramik |
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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 Stocks Directory module to find actively traded stocks across global markets.
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