Correlation Between Energi Mega and Link Net
Can any of the company-specific risk be diversified away by investing in both Energi Mega and Link Net 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 Link Net 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 Link Net Tbk, you can compare the effects of market volatilities on Energi Mega and Link Net 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 Link Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energi Mega and Link Net.
Diversification Opportunities for Energi Mega and Link Net
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Energi and Link is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Energi Mega Persada and Link Net Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Link Net Tbk 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 Link Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Link Net Tbk has no effect on the direction of Energi Mega i.e., Energi Mega and Link Net go up and down completely randomly.
Pair Corralation between Energi Mega and Link Net
Assuming the 90 days trading horizon Energi Mega Persada is expected to under-perform the Link Net. In addition to that, Energi Mega is 1.25 times more volatile than Link Net Tbk. It trades about -0.11 of its total potential returns per unit of risk. Link Net Tbk is currently generating about -0.04 per unit of volatility. If you would invest 132,000 in Link Net Tbk on September 5, 2024 and sell it today you would lose (5,500) from holding Link Net Tbk or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energi Mega Persada vs. Link Net Tbk
Performance |
| Timeline |
| Energi Mega Persada |
| Link Net Tbk |
Energi Mega and Link Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energi Mega and Link Net
The main advantage of trading using opposite Energi Mega and Link Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energi Mega position performs unexpectedly, Link Net 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 Link Net will offset losses from the drop in Link Net's long position.| Energi Mega vs. Weha Transportasi Indonesia | Energi Mega vs. Mitra Pinasthika Mustika | Energi Mega vs. Jakarta Int Hotels | Energi Mega vs. Asuransi Harta Aman |
| Link Net vs. Energi Mega Persada | Link Net vs. Mitra Pinasthika Mustika | Link Net vs. Jakarta Int Hotels | Link Net vs. Indosat 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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