Correlation Between Era Mandiri and Perintis Triniti

Can any of the company-specific risk be diversified away by investing in both Era Mandiri and Perintis Triniti 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 Perintis Triniti 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 Perintis Triniti Properti, you can compare the effects of market volatilities on Era Mandiri and Perintis Triniti 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 Perintis Triniti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Era Mandiri and Perintis Triniti.

Diversification Opportunities for Era Mandiri and Perintis Triniti

0.25

Correlation Coefficient

Era Mandiri  Perintis Triniti

Modest diversification

The 3 months correlation between Era and Perintis is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Era Mandiri Cemerlang and Perintis Triniti Properti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perintis Triniti Properti 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 Perintis Triniti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perintis Triniti Properti has no effect on the direction of Era Mandiri i.e., Era Mandiri and Perintis Triniti go up and down completely randomly.

Pair Corralation between Era Mandiri and Perintis Triniti

Assuming the 90 days trading horizon Era Mandiri Cemerlang is expected to generate 2.68 times more return on investment than Perintis Triniti. However, Era Mandiri is 2.68 times more volatile than Perintis Triniti Properti. It trades about 0.27 of its potential returns per unit of risk. Perintis Triniti Properti is currently generating about 0.11 per unit of risk. If you would invest  2,600  in Era Mandiri Cemerlang on October 24, 2024 and sell it today you would earn a total of  700.00  from holding Era Mandiri Cemerlang or generate 26.92% return on investment over 90 days.

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

Era Mandiri Cemerlang  vs.  Perintis Triniti Properti

Era Mandiri Cemerlang

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Era Mandiri Cemerlang are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Era Mandiri is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Perintis Triniti Properti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perintis Triniti Properti has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Era Mandiri and Perintis Triniti

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

The idea behind Era Mandiri Cemerlang and Perintis Triniti Properti 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.