Correlation Between Indoritel Makmur and Energi Mega
Can any of the company-specific risk be diversified away by investing in both Indoritel Makmur 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 Indoritel Makmur and Energi Mega into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indoritel Makmur Internasional and Energi Mega Persada, you can compare the effects of market volatilities on Indoritel Makmur 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 Indoritel Makmur with a short position of Energi Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indoritel Makmur and Energi Mega.
Diversification Opportunities for Indoritel Makmur and Energi Mega
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indoritel and Energi is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Indoritel Makmur Internasional 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 Indoritel Makmur 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 Indoritel Makmur Internasional 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 Indoritel Makmur i.e., Indoritel Makmur and Energi Mega go up and down completely randomly.
Pair Corralation between Indoritel Makmur and Energi Mega
Assuming the 90 days trading horizon Indoritel Makmur Internasional is expected to generate 0.24 times more return on investment than Energi Mega. However, Indoritel Makmur Internasional is 4.23 times less risky than Energi Mega. It trades about 0.02 of its potential returns per unit of risk. Energi Mega Persada is currently generating about -0.08 per unit of risk. If you would invest 907,500 in Indoritel Makmur Internasional on September 12, 2024 and sell it today you would earn a total of 2,500 from holding Indoritel Makmur Internasional or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Indoritel Makmur Internasional vs. Energi Mega Persada
Performance |
| Timeline |
| Indoritel Makmur Int |
| Energi Mega Persada |
Indoritel Makmur and Energi Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indoritel Makmur and Energi Mega
The main advantage of trading using opposite Indoritel Makmur and Energi Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indoritel Makmur 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.| Indoritel Makmur vs. Mnc Land Tbk | Indoritel Makmur vs. MNC Vision Networks | Indoritel Makmur vs. MD Pictures Tbk | Indoritel Makmur 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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