Correlation Between Hexindo Adiperkasa and Enseval Putra

Can any of the company-specific risk be diversified away by investing in both Hexindo Adiperkasa and Enseval Putra 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 Hexindo Adiperkasa and Enseval Putra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hexindo Adiperkasa Tbk and Enseval Putra Megatrading, you can compare the effects of market volatilities on Hexindo Adiperkasa and Enseval Putra 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 Hexindo Adiperkasa with a short position of Enseval Putra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexindo Adiperkasa and Enseval Putra.

Diversification Opportunities for Hexindo Adiperkasa and Enseval Putra

0.9

Correlation Coefficient

Hexindo Adiperkasa  Enseval Putra

Almost no diversification

The 3 months correlation between Hexindo and Enseval is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hexindo Adiperkasa Tbk and Enseval Putra Megatrading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enseval Putra Megatrading and Hexindo Adiperkasa 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 Hexindo Adiperkasa Tbk are associated (or correlated) with Enseval Putra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enseval Putra Megatrading has no effect on the direction of Hexindo Adiperkasa i.e., Hexindo Adiperkasa and Enseval Putra go up and down completely randomly.

Pair Corralation between Hexindo Adiperkasa and Enseval Putra

Assuming the 90 days trading horizon Hexindo Adiperkasa Tbk is expected to under-perform the Enseval Putra. In addition to that, Hexindo Adiperkasa is 1.52 times more volatile than Enseval Putra Megatrading. It trades about -0.13 of its total potential returns per unit of risk. Enseval Putra Megatrading is currently generating about -0.18 per unit of volatility. If you would invest  243,000  in Enseval Putra Megatrading on December 31, 2024 and sell it today you would lose (29,000) from holding Enseval Putra Megatrading or give up 11.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Hexindo Adiperkasa Tbk  vs.  Enseval Putra Megatrading

Hexindo Adiperkasa Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hexindo Adiperkasa Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Enseval Putra Megatrading

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enseval Putra Megatrading has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Hexindo Adiperkasa and Enseval Putra

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

The idea behind Hexindo Adiperkasa Tbk and Enseval Putra Megatrading 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.