Correlation Between Exploitasi Energi and Central Proteina
Can any of the company-specific risk be diversified away by investing in both Exploitasi Energi and Central Proteina 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 Exploitasi Energi and Central Proteina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exploitasi Energi Indonesia and Central Proteina Prima, you can compare the effects of market volatilities on Exploitasi Energi and Central Proteina 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 Exploitasi Energi with a short position of Central Proteina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exploitasi Energi and Central Proteina.
Diversification Opportunities for Exploitasi Energi and Central Proteina
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Exploitasi and Central is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Exploitasi Energi Indonesia and Central Proteina Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Proteina Prima and Exploitasi Energi 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 Exploitasi Energi Indonesia are associated (or correlated) with Central Proteina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Proteina Prima has no effect on the direction of Exploitasi Energi i.e., Exploitasi Energi and Central Proteina go up and down completely randomly.
Pair Corralation between Exploitasi Energi and Central Proteina
Assuming the 90 days trading horizon Exploitasi Energi Indonesia is expected to generate 1.47 times more return on investment than Central Proteina. However, Exploitasi Energi is 1.47 times more volatile than Central Proteina Prima. It trades about 0.41 of its potential returns per unit of risk. Central Proteina Prima is currently generating about 0.04 per unit of risk. If you would invest 2,000 in Exploitasi Energi Indonesia on October 26, 2024 and sell it today you would earn a total of 1,400 from holding Exploitasi Energi Indonesia or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Exploitasi Energi Indonesia vs. Central Proteina Prima
Performance |
| Timeline |
| Exploitasi Energi |
| Central Proteina Prima |
Exploitasi Energi and Central Proteina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exploitasi Energi and Central Proteina
The main advantage of trading using opposite Exploitasi Energi and Central Proteina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exploitasi Energi position performs unexpectedly, Central Proteina 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 Central Proteina will offset losses from the drop in Central Proteina's long position.| Exploitasi Energi vs. Central Proteina Prima | Exploitasi Energi vs. Darma Henwa Tbk | Exploitasi Energi vs. Bakrieland Development Tbk | Exploitasi Energi vs. Energi Mega Persada |
| Central Proteina vs. Bakrie Brothers Tbk | Central Proteina vs. Bakrieland Development Tbk | Central Proteina vs. Darma Henwa Tbk | Central Proteina vs. Bakrie Sumatera Plantations |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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