Correlation Between Tera Data and Pertamina Geothermal
Can any of the company-specific risk be diversified away by investing in both Tera Data and Pertamina Geothermal 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 Tera Data and Pertamina Geothermal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tera Data Indonusa and Pertamina Geothermal Energy, you can compare the effects of market volatilities on Tera Data and Pertamina Geothermal 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 Tera Data with a short position of Pertamina Geothermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tera Data and Pertamina Geothermal.
Diversification Opportunities for Tera Data and Pertamina Geothermal
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tera and Pertamina is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tera Data Indonusa and Pertamina Geothermal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pertamina Geothermal and Tera Data 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 Tera Data Indonusa are associated (or correlated) with Pertamina Geothermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pertamina Geothermal has no effect on the direction of Tera Data i.e., Tera Data and Pertamina Geothermal go up and down completely randomly.
Pair Corralation between Tera Data and Pertamina Geothermal
Assuming the 90 days trading horizon Tera Data Indonusa is expected to generate 1.04 times more return on investment than Pertamina Geothermal. However, Tera Data is 1.04 times more volatile than Pertamina Geothermal Energy. It trades about 0.18 of its potential returns per unit of risk. Pertamina Geothermal Energy is currently generating about -0.21 per unit of risk. If you would invest 11,524 in Tera Data Indonusa on September 3, 2024 and sell it today you would earn a total of 676.00 from holding Tera Data Indonusa or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tera Data Indonusa vs. Pertamina Geothermal Energy
Performance |
| Timeline |
| Tera Data Indonusa |
| Pertamina Geothermal |
Tera Data and Pertamina Geothermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tera Data and Pertamina Geothermal
The main advantage of trading using opposite Tera Data and Pertamina Geothermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tera Data position performs unexpectedly, Pertamina Geothermal 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 Pertamina Geothermal will offset losses from the drop in Pertamina Geothermal's long position.| Tera Data vs. PT Dewi Shri | Tera Data vs. Autopedia Sukses Lestari | Tera Data vs. Mitra Pinasthika Mustika | Tera Data vs. Jakarta Int Hotels |
| Pertamina Geothermal vs. Chandra Asri Petrochemical | Pertamina Geothermal vs. Bank Negara Indonesia | Pertamina Geothermal vs. Sumber Alfaria Trijaya | Pertamina Geothermal 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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