Correlation Between Enseval Putra and Indonesian Tobacco
Can any of the company-specific risk be diversified away by investing in both Enseval Putra and Indonesian Tobacco 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 Enseval Putra and Indonesian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enseval Putra Megatrading and Indonesian Tobacco Tbk, you can compare the effects of market volatilities on Enseval Putra and Indonesian Tobacco 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 Enseval Putra with a short position of Indonesian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enseval Putra and Indonesian Tobacco.
Diversification Opportunities for Enseval Putra and Indonesian Tobacco
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Enseval and Indonesian is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Enseval Putra Megatrading and Indonesian Tobacco Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indonesian Tobacco Tbk and Enseval Putra 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 Enseval Putra Megatrading are associated (or correlated) with Indonesian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indonesian Tobacco Tbk has no effect on the direction of Enseval Putra i.e., Enseval Putra and Indonesian Tobacco go up and down completely randomly.
Pair Corralation between Enseval Putra and Indonesian Tobacco
Assuming the 90 days trading horizon Enseval Putra Megatrading is expected to under-perform the Indonesian Tobacco. But the stock apears to be less risky and, when comparing its historical volatility, Enseval Putra Megatrading is 2.42 times less risky than Indonesian Tobacco. The stock trades about -0.11 of its potential returns per unit of risk. The Indonesian Tobacco Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 25,800 in Indonesian Tobacco Tbk on September 5, 2024 and sell it today you would earn a total of 200.00 from holding Indonesian Tobacco Tbk or generate 0.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Enseval Putra Megatrading vs. Indonesian Tobacco Tbk
Performance |
Timeline |
Enseval Putra Megatrading |
Indonesian Tobacco Tbk |
Enseval Putra and Indonesian Tobacco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enseval Putra and Indonesian Tobacco
The main advantage of trading using opposite Enseval Putra and Indonesian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enseval Putra position performs unexpectedly, Indonesian Tobacco 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 Indonesian Tobacco will offset losses from the drop in Indonesian Tobacco's long position.Enseval Putra vs. Surya Citra Media | Enseval Putra vs. Sawit Sumbermas Sarana | Enseval Putra vs. Mitra Pinasthika Mustika | Enseval Putra vs. Jakarta Int Hotels |
Indonesian Tobacco vs. J Resources Asia | Indonesian Tobacco vs. Garudafood Putra Putri | Indonesian Tobacco vs. Provident Agro Tbk | Indonesian Tobacco vs. Mitra Pinasthika Mustika |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Transaction History View history of all your transactions and understand their impact on performance | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |