Correlation Between Energi Mega and Sariguna Primatirta
Can any of the company-specific risk be diversified away by investing in both Energi Mega and Sariguna Primatirta 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 Sariguna Primatirta 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 Sariguna Primatirta PT, you can compare the effects of market volatilities on Energi Mega and Sariguna Primatirta 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 Sariguna Primatirta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energi Mega and Sariguna Primatirta.
Diversification Opportunities for Energi Mega and Sariguna Primatirta
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energi and Sariguna is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Energi Mega Persada and Sariguna Primatirta PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sariguna Primatirta 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 Sariguna Primatirta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sariguna Primatirta has no effect on the direction of Energi Mega i.e., Energi Mega and Sariguna Primatirta go up and down completely randomly.
Pair Corralation between Energi Mega and Sariguna Primatirta
Assuming the 90 days trading horizon Energi Mega is expected to generate 21.45 times less return on investment than Sariguna Primatirta. In addition to that, Energi Mega is 1.19 times more volatile than Sariguna Primatirta PT. It trades about 0.0 of its total potential returns per unit of risk. Sariguna Primatirta PT is currently generating about 0.11 per unit of volatility. If you would invest 47,271 in Sariguna Primatirta PT on November 27, 2024 and sell it today you would earn a total of 94,229 from holding Sariguna Primatirta PT or generate 199.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Energi Mega Persada vs. Sariguna Primatirta PT
Performance |
| Timeline |
| Energi Mega Persada |
| Sariguna Primatirta |
Energi Mega and Sariguna Primatirta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energi Mega and Sariguna Primatirta
The main advantage of trading using opposite Energi Mega and Sariguna Primatirta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energi Mega position performs unexpectedly, Sariguna Primatirta 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 Sariguna Primatirta will offset losses from the drop in Sariguna Primatirta'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 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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