Correlation Between Energi Mega and Exploitasi Energi
Can any of the company-specific risk be diversified away by investing in both Energi Mega and Exploitasi Energi 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 Exploitasi Energi 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 Exploitasi Energi Indonesia, you can compare the effects of market volatilities on Energi Mega and Exploitasi Energi 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 Exploitasi Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energi Mega and Exploitasi Energi.
Diversification Opportunities for Energi Mega and Exploitasi Energi
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energi and Exploitasi is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Energi Mega Persada and Exploitasi Energi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exploitasi Energi 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 Exploitasi Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exploitasi Energi has no effect on the direction of Energi Mega i.e., Energi Mega and Exploitasi Energi go up and down completely randomly.
Pair Corralation between Energi Mega and Exploitasi Energi
Assuming the 90 days trading horizon Energi Mega Persada is expected to under-perform the Exploitasi Energi. But the stock apears to be less risky and, when comparing its historical volatility, Energi Mega Persada is 2.75 times less risky than Exploitasi Energi. The stock trades about -0.09 of its potential returns per unit of risk. The Exploitasi Energi Indonesia is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Exploitasi Energi Indonesia on October 26, 2024 and sell it today you would earn a total of 2,800 from holding Exploitasi Energi Indonesia or generate 466.67% 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. Exploitasi Energi Indonesia
Performance |
| Timeline |
| Energi Mega Persada |
| Exploitasi Energi |
Energi Mega and Exploitasi Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energi Mega and Exploitasi Energi
The main advantage of trading using opposite Energi Mega and Exploitasi Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energi Mega position performs unexpectedly, Exploitasi Energi 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 Exploitasi Energi will offset losses from the drop in Exploitasi Energi'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 |
| Exploitasi Energi vs. Central Proteina Prima | Exploitasi Energi vs. Darma Henwa Tbk | Exploitasi Energi vs. Bakrieland Development Tbk | Exploitasi Energi vs. Energi Mega Persada |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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