Correlation Between PT Jobubu and Pertamina Geothermal
Can any of the company-specific risk be diversified away by investing in both PT Jobubu 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 PT Jobubu and Pertamina Geothermal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Jobubu Jarum and Pertamina Geothermal Energy, you can compare the effects of market volatilities on PT Jobubu 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 PT Jobubu with a short position of Pertamina Geothermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Jobubu and Pertamina Geothermal.
Diversification Opportunities for PT Jobubu and Pertamina Geothermal
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BEER and Pertamina is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PT Jobubu Jarum and Pertamina Geothermal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pertamina Geothermal and PT Jobubu 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 PT Jobubu Jarum 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 PT Jobubu i.e., PT Jobubu and Pertamina Geothermal go up and down completely randomly.
Pair Corralation between PT Jobubu and Pertamina Geothermal
Assuming the 90 days trading horizon PT Jobubu Jarum is expected to under-perform the Pertamina Geothermal. In addition to that, PT Jobubu is 1.03 times more volatile than Pertamina Geothermal Energy. It trades about -0.05 of its total potential returns per unit of risk. Pertamina Geothermal Energy is currently generating about 0.02 per unit of volatility. If you would invest 81,498 in Pertamina Geothermal Energy on November 27, 2024 and sell it today you would earn a total of 12,502 from holding Pertamina Geothermal Energy or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Jobubu Jarum vs. Pertamina Geothermal Energy
Performance |
| Timeline |
| PT Jobubu Jarum |
| Pertamina Geothermal |
PT Jobubu and Pertamina Geothermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Jobubu and Pertamina Geothermal
The main advantage of trading using opposite PT Jobubu and Pertamina Geothermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Jobubu 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.| PT Jobubu vs. Cisarua Mountain Dairy | PT Jobubu vs. Triputra Agro Persada | PT Jobubu vs. Wahana Inti MakmurTbk | PT Jobubu vs. PT Hasnur Internasional |
| Pertamina Geothermal vs. City Retail Developments | Pertamina Geothermal vs. Humpuss Intermoda Transportasi | Pertamina Geothermal vs. Protech Mitra Perkasa | Pertamina Geothermal vs. Global Mediacom Tbk |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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