Correlation Between Mahkota Group and Era Mandiri
Can any of the company-specific risk be diversified away by investing in both Mahkota Group and Era Mandiri 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 Mahkota Group and Era Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mahkota Group Tbk and Era Mandiri Cemerlang, you can compare the effects of market volatilities on Mahkota Group and Era Mandiri 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 Mahkota Group with a short position of Era Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mahkota Group and Era Mandiri.
Diversification Opportunities for Mahkota Group and Era Mandiri
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mahkota and Era is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mahkota Group Tbk and Era Mandiri Cemerlang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Mandiri Cemerlang and Mahkota Group 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 Mahkota Group Tbk are associated (or correlated) with Era Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Mandiri Cemerlang has no effect on the direction of Mahkota Group i.e., Mahkota Group and Era Mandiri go up and down completely randomly.
Pair Corralation between Mahkota Group and Era Mandiri
Assuming the 90 days trading horizon Mahkota Group Tbk is expected to generate 0.48 times more return on investment than Era Mandiri. However, Mahkota Group Tbk is 2.07 times less risky than Era Mandiri. It trades about 0.28 of its potential returns per unit of risk. Era Mandiri Cemerlang is currently generating about -0.48 per unit of risk. If you would invest 66,000 in Mahkota Group Tbk on September 13, 2024 and sell it today you would earn a total of 4,000 from holding Mahkota Group Tbk or generate 6.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mahkota Group Tbk vs. Era Mandiri Cemerlang
Performance |
Timeline |
Mahkota Group Tbk |
Era Mandiri Cemerlang |
Mahkota Group and Era Mandiri Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mahkota Group and Era Mandiri
The main advantage of trading using opposite Mahkota Group and Era Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mahkota Group position performs unexpectedly, Era Mandiri 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 Era Mandiri will offset losses from the drop in Era Mandiri's long position.Mahkota Group vs. Austindo Nusantara Jaya | Mahkota Group vs. Garudafood Putra Putri | Mahkota Group vs. Provident Agro Tbk | Mahkota Group vs. Dharma Satya Nusantara |
Era Mandiri vs. Mahkota Group Tbk | Era Mandiri vs. Palma Serasih PT | Era Mandiri vs. Cisadane Sawit Raya | Era Mandiri vs. Diamond Food Indonesia |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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