Correlation Between Era Mandiri and Sejahtera Bintang

Can any of the company-specific risk be diversified away by investing in both Era Mandiri and Sejahtera Bintang 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 Era Mandiri and Sejahtera Bintang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Era Mandiri Cemerlang and Sejahtera Bintang Abadi, you can compare the effects of market volatilities on Era Mandiri and Sejahtera Bintang 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 Era Mandiri with a short position of Sejahtera Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Era Mandiri and Sejahtera Bintang.

Diversification Opportunities for Era Mandiri and Sejahtera Bintang

0.0

Correlation Coefficient

Era Mandiri  Sejahtera Bintang

Pay attention - limited upside

The 3 months correlation between Era and Sejahtera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Era Mandiri Cemerlang and Sejahtera Bintang Abadi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejahtera Bintang Abadi and Era Mandiri 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 Era Mandiri Cemerlang are associated (or correlated) with Sejahtera Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejahtera Bintang Abadi has no effect on the direction of Era Mandiri i.e., Era Mandiri and Sejahtera Bintang go up and down completely randomly.

Pair Corralation between Era Mandiri and Sejahtera Bintang

If you would invest  2,400  in Era Mandiri Cemerlang on October 7, 2024 and sell it today you would earn a total of  100.00  from holding Era Mandiri Cemerlang or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Era Mandiri Cemerlang  vs.  Sejahtera Bintang Abadi

Era Mandiri Cemerlang

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Era Mandiri Cemerlang 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sejahtera Bintang Abadi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sejahtera Bintang Abadi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sejahtera Bintang 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 Era Mandiri and Sejahtera Bintang

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

The idea behind Era Mandiri Cemerlang and Sejahtera Bintang Abadi 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..