Correlation Between Energi Mega and Austindo Nusantara
Can any of the company-specific risk be diversified away by investing in both Energi Mega and Austindo Nusantara 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 Energi Mega and Austindo Nusantara into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energi Mega Persada and Austindo Nusantara Jaya, you can compare the effects of market volatilities on Energi Mega and Austindo Nusantara 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 Energi Mega with a short position of Austindo Nusantara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energi Mega and Austindo Nusantara.
Diversification Opportunities for Energi Mega and Austindo Nusantara
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energi and Austindo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Energi Mega Persada and Austindo Nusantara Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austindo Nusantara Jaya and Energi Mega 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 Energi Mega Persada are associated (or correlated) with Austindo Nusantara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austindo Nusantara Jaya has no effect on the direction of Energi Mega i.e., Energi Mega and Austindo Nusantara go up and down completely randomly.
Pair Corralation between Energi Mega and Austindo Nusantara
Assuming the 90 days trading horizon Energi Mega Persada is expected to under-perform the Austindo Nusantara. But the stock apears to be less risky and, when comparing its historical volatility, Energi Mega Persada is 1.21 times less risky than Austindo Nusantara. The stock trades about -0.08 of its potential returns per unit of risk. The Austindo Nusantara Jaya is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 74,500 in Austindo Nusantara Jaya on November 27, 2024 and sell it today you would earn a total of 15,500 from holding Austindo Nusantara Jaya or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energi Mega Persada vs. Austindo Nusantara Jaya
Performance |
| Timeline |
| Energi Mega Persada |
| Austindo Nusantara Jaya |
Energi Mega and Austindo Nusantara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energi Mega and Austindo Nusantara
The main advantage of trading using opposite Energi Mega and Austindo Nusantara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energi Mega position performs unexpectedly, Austindo Nusantara 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 Austindo Nusantara will offset losses from the drop in Austindo Nusantara's long position.| Energi Mega vs. Bakrieland Development Tbk | Energi Mega vs. Bakrie Sumatera Plantations | Energi Mega vs. Bakrie Brothers Tbk | Energi Mega vs. Bumi Resources Tbk |
| Austindo Nusantara vs. Dharma Satya Nusantara | Austindo Nusantara vs. Provident Agro Tbk | Austindo Nusantara vs. Salim Ivomas Pratama | Austindo Nusantara vs. Jaya Agra Wattie |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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