Correlation Between Eestech and PT Sarana

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

By analyzing existing cross correlation between Eestech and PT Sarana Menara, you can compare the effects of market volatilities on Eestech and PT Sarana 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 Eestech with a short position of PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eestech and PT Sarana.

Diversification Opportunities for Eestech and PT Sarana

-0.72

Correlation Coefficient

Eestech  PT Sarana

Pay attention - limited upside

The 3 months correlation between Eestech and SMNUF is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Eestech and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara and Eestech 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 Eestech are associated (or correlated) with PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Eestech i.e., Eestech and PT Sarana go up and down completely randomly.

Pair Corralation between Eestech and PT Sarana

Given the investment horizon of 90 days Eestech is expected to generate 25.87 times more return on investment than PT Sarana. However, Eestech is 25.87 times more volatile than PT Sarana Menara. It trades about 0.15 of its potential returns per unit of risk. PT Sarana Menara is currently generating about -0.09 per unit of risk. If you would invest  0.04  in Eestech on May 7, 2025 and sell it today you would earn a total of  6.96  from holding Eestech or generate 17400.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Eestech  vs.  PT Sarana Menara

Eestech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eestech are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Eestech demonstrated solid returns over the last few months and may actually be approaching a breakup point.

PT Sarana Menara

Risk-Adjusted Performance

Weakest

Over the last 90 days PT Sarana Menara has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Eestech and PT Sarana

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

The idea behind Eestech and PT Sarana Menara 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.