Correlation Between Elang Mahkota and Petrosea Tbk
Can any of the company-specific risk be diversified away by investing in both Elang Mahkota and Petrosea Tbk 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 Elang Mahkota and Petrosea Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elang Mahkota Teknologi and Petrosea Tbk, you can compare the effects of market volatilities on Elang Mahkota and Petrosea Tbk 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 Elang Mahkota with a short position of Petrosea Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elang Mahkota and Petrosea Tbk.
Diversification Opportunities for Elang Mahkota and Petrosea Tbk
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elang and Petrosea is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Elang Mahkota Teknologi and Petrosea Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrosea Tbk and Elang Mahkota 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 Elang Mahkota Teknologi are associated (or correlated) with Petrosea Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrosea Tbk has no effect on the direction of Elang Mahkota i.e., Elang Mahkota and Petrosea Tbk go up and down completely randomly.
Pair Corralation between Elang Mahkota and Petrosea Tbk
Assuming the 90 days trading horizon Elang Mahkota Teknologi is expected to under-perform the Petrosea Tbk. In addition to that, Elang Mahkota is 1.03 times more volatile than Petrosea Tbk. It trades about 0.0 of its total potential returns per unit of risk. Petrosea Tbk is currently generating about 0.17 per unit of volatility. If you would invest 1,680,000 in Petrosea Tbk on August 30, 2024 and sell it today you would earn a total of 182,500 from holding Petrosea Tbk or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elang Mahkota Teknologi vs. Petrosea Tbk
Performance |
| Timeline |
| Elang Mahkota Teknologi |
| Petrosea Tbk |
Elang Mahkota and Petrosea Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elang Mahkota and Petrosea Tbk
The main advantage of trading using opposite Elang Mahkota and Petrosea Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elang Mahkota position performs unexpectedly, Petrosea Tbk 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 Petrosea Tbk will offset losses from the drop in Petrosea Tbk's long position.| Elang Mahkota vs. Bank Artos Indonesia | Elang Mahkota vs. PT Bukalapak | Elang Mahkota vs. Sumber Alfaria Trijaya | Elang Mahkota vs. Merdeka Copper Gold |
| Petrosea Tbk vs. Indika Energy Tbk | Petrosea Tbk vs. Harum Energy Tbk | Petrosea Tbk vs. Indo Tambangraya Megah | Petrosea Tbk vs. Gajah Tunggal 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |