Correlation Between Smartfren Telecom and Exploitasi Energi
Can any of the company-specific risk be diversified away by investing in both Smartfren Telecom 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 Smartfren Telecom and Exploitasi Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smartfren Telecom Tbk and Exploitasi Energi Indonesia, you can compare the effects of market volatilities on Smartfren Telecom 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 Smartfren Telecom with a short position of Exploitasi Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartfren Telecom and Exploitasi Energi.
Diversification Opportunities for Smartfren Telecom and Exploitasi Energi
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Smartfren and Exploitasi is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Smartfren Telecom Tbk and Exploitasi Energi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exploitasi Energi and Smartfren Telecom 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 Smartfren Telecom Tbk 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 Smartfren Telecom i.e., Smartfren Telecom and Exploitasi Energi go up and down completely randomly.
Pair Corralation between Smartfren Telecom and Exploitasi Energi
Assuming the 90 days trading horizon Smartfren Telecom Tbk is expected to under-perform the Exploitasi Energi. But the stock apears to be less risky and, when comparing its historical volatility, Smartfren Telecom Tbk is 3.29 times less risky than Exploitasi Energi. The stock trades about -0.11 of its potential returns per unit of risk. The Exploitasi Energi Indonesia is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 700.00 in Exploitasi Energi Indonesia on October 25, 2024 and sell it today you would earn a total of 2,400 from holding Exploitasi Energi Indonesia or generate 342.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartfren Telecom Tbk vs. Exploitasi Energi Indonesia
Performance |
| Timeline |
| Smartfren Telecom Tbk |
| Exploitasi Energi |
Smartfren Telecom and Exploitasi Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartfren Telecom and Exploitasi Energi
The main advantage of trading using opposite Smartfren Telecom and Exploitasi Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartfren Telecom 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.| Smartfren Telecom vs. Media Nusantara Citra | Smartfren Telecom vs. Matahari Department Store | Smartfren Telecom vs. Akr Corporindo Tbk | Smartfren Telecom vs. XL Axiata 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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