Correlation Between Energi Mega and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Energi Mega and PT Sarana 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 PT Sarana 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 PT Sarana Menara, you can compare the effects of market volatilities on Energi Mega and PT Sarana 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 PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energi Mega and PT Sarana.
Diversification Opportunities for Energi Mega and PT Sarana
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energi and TOWR is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Energi Mega Persada and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara 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 PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Energi Mega i.e., Energi Mega and PT Sarana go up and down completely randomly.
Pair Corralation between Energi Mega and PT Sarana
Assuming the 90 days trading horizon Energi Mega Persada is expected to under-perform the PT Sarana. In addition to that, Energi Mega is 3.5 times more volatile than PT Sarana Menara. It trades about -0.17 of its total potential returns per unit of risk. PT Sarana Menara is currently generating about -0.45 per unit of volatility. If you would invest 79,000 in PT Sarana Menara on August 31, 2024 and sell it today you would lose (8,500) from holding PT Sarana Menara or give up 10.76% 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. PT Sarana Menara
Performance |
| Timeline |
| Energi Mega Persada |
| PT Sarana Menara |
Energi Mega and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energi Mega and PT Sarana
The main advantage of trading using opposite Energi Mega and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energi Mega position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana's long position.| Energi Mega vs. Mitrabahtera Segara Sejati | Energi Mega vs. Weha Transportasi Indonesia | Energi Mega vs. Rig Tenders Tbk | Energi Mega vs. Rukun Raharja Tbk |
| PT Sarana vs. Indosat Tbk | PT Sarana vs. XL Axiata Tbk | PT Sarana vs. Energi Mega Persada | PT Sarana vs. Bakrie Brothers 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 Stocks Directory module to find actively traded stocks across global markets.
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