Correlation Between Smartfren Telecom and Energi Mega
Can any of the company-specific risk be diversified away by investing in both Smartfren Telecom and Energi Mega 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 Energi Mega 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 Energi Mega Persada, you can compare the effects of market volatilities on Smartfren Telecom and Energi Mega 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 Energi Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartfren Telecom and Energi Mega.
Diversification Opportunities for Smartfren Telecom and Energi Mega
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Smartfren and Energi is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Smartfren Telecom Tbk and Energi Mega Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energi Mega Persada 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 Energi Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energi Mega Persada has no effect on the direction of Smartfren Telecom i.e., Smartfren Telecom and Energi Mega go up and down completely randomly.
Pair Corralation between Smartfren Telecom and Energi Mega
Assuming the 90 days trading horizon Smartfren Telecom Tbk is expected to under-perform the Energi Mega. In addition to that, Smartfren Telecom is 1.14 times more volatile than Energi Mega Persada. It trades about 0.0 of its total potential returns per unit of risk. Energi Mega Persada is currently generating about 0.08 per unit of volatility. If you would invest 17,700 in Energi Mega Persada on September 5, 2024 and sell it today you would earn a total of 5,700 from holding Energi Mega Persada or generate 32.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Smartfren Telecom Tbk vs. Energi Mega Persada
Performance |
| Timeline |
| Smartfren Telecom Tbk |
| Energi Mega Persada |
Smartfren Telecom and Energi Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartfren Telecom and Energi Mega
The main advantage of trading using opposite Smartfren Telecom and Energi Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartfren Telecom position performs unexpectedly, Energi Mega 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 Energi Mega will offset losses from the drop in Energi Mega's long position.| Smartfren Telecom vs. Energi Mega Persada | Smartfren Telecom vs. Mitra Pinasthika Mustika | Smartfren Telecom vs. Jakarta Int Hotels | Smartfren Telecom vs. Indosat Tbk |
| Energi Mega vs. Weha Transportasi Indonesia | Energi Mega vs. Mitra Pinasthika Mustika | Energi Mega vs. Jakarta Int Hotels | Energi Mega vs. Asuransi Harta Aman |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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