Correlation Between Tower Bersama and Enseval Putra

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

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

Diversification Opportunities for Tower Bersama and Enseval Putra

-0.75

Correlation Coefficient

Tower Bersama  Enseval Putra

Pay attention - limited upside

The 3 months correlation between Tower and Enseval is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tower Bersama Infrastructure 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 Tower Bersama 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 Tower Bersama Infrastructure 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 Tower Bersama i.e., Tower Bersama and Enseval Putra go up and down completely randomly.

Pair Corralation between Tower Bersama and Enseval Putra

Assuming the 90 days trading horizon Tower Bersama Infrastructure is expected to generate 1.57 times more return on investment than Enseval Putra. However, Tower Bersama is 1.57 times more volatile than Enseval Putra Megatrading. It trades about 0.11 of its potential returns per unit of risk. Enseval Putra Megatrading is currently generating about -0.08 per unit of risk. If you would invest  185,102  in Tower Bersama Infrastructure on October 17, 2024 and sell it today you would earn a total of  19,898  from holding Tower Bersama Infrastructure or generate 10.75% return on investment over 90 days.

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

Tower Bersama Infrastructure  vs.  Enseval Putra Megatrading

Tower Bersama Infras

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tower Bersama Infrastructure are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Tower Bersama may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Enseval Putra Megatrading

Risk-Adjusted Performance

0 of 100

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 quite persistent forward-looking signals, Enseval Putra 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 Tower Bersama and Enseval Putra

The main advantage of trading using opposite Tower Bersama and Enseval Putra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Bersama 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 Tower Bersama Infrastructure 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.