Correlation Between Centratama Telekomunikasi and Energi Mega
Can any of the company-specific risk be diversified away by investing in both Centratama Telekomunikasi and Energi Mega 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 Centratama Telekomunikasi and Energi Mega into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centratama Telekomunikasi Ind and Energi Mega Persada, you can compare the effects of market volatilities on Centratama Telekomunikasi and Energi Mega 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 Centratama Telekomunikasi with a short position of Energi Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centratama Telekomunikasi and Energi Mega.
Diversification Opportunities for Centratama Telekomunikasi and Energi Mega
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Centratama and Energi is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Centratama Telekomunikasi Ind and Energi Mega Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energi Mega Persada and Centratama Telekomunikasi 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 Centratama Telekomunikasi Ind are associated (or correlated) with Energi Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energi Mega Persada has no effect on the direction of Centratama Telekomunikasi i.e., Centratama Telekomunikasi and Energi Mega go up and down completely randomly.
Pair Corralation between Centratama Telekomunikasi and Energi Mega
Assuming the 90 days trading horizon Centratama Telekomunikasi Ind is expected to under-perform the Energi Mega. In addition to that, Centratama Telekomunikasi is 1.2 times more volatile than Energi Mega Persada. It trades about -0.1 of its total potential returns per unit of risk. Energi Mega Persada is currently generating about -0.08 per unit of volatility. If you would invest 26,400 in Energi Mega Persada on September 12, 2024 and sell it today you would lose (1,600) from holding Energi Mega Persada or give up 6.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Centratama Telekomunikasi Ind vs. Energi Mega Persada
Performance |
| Timeline |
| Centratama Telekomunikasi |
| Energi Mega Persada |
Centratama Telekomunikasi and Energi Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centratama Telekomunikasi and Energi Mega
The main advantage of trading using opposite Centratama Telekomunikasi and Energi Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centratama Telekomunikasi position performs unexpectedly, Energi Mega 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 Energi Mega will offset losses from the drop in Energi Mega's long position.| Centratama Telekomunikasi vs. Mnc Land Tbk | Centratama Telekomunikasi vs. MNC Vision Networks | Centratama Telekomunikasi vs. MD Pictures Tbk | Centratama Telekomunikasi vs. Link Net Tbk |
| Energi Mega vs. Bakrieland Development Tbk | Energi Mega vs. Bakrie Sumatera Plantations | Energi Mega vs. Bakrie Brothers Tbk | Energi Mega vs. Bumi Resources 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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