Correlation Between Harum Energy and Exploitasi Energi
Can any of the company-specific risk be diversified away by investing in both Harum Energy 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 Harum Energy and Exploitasi Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harum Energy Tbk and Exploitasi Energi Indonesia, you can compare the effects of market volatilities on Harum Energy 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 Harum Energy with a short position of Exploitasi Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harum Energy and Exploitasi Energi.
Diversification Opportunities for Harum Energy and Exploitasi Energi
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harum and Exploitasi is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Harum Energy 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 Harum Energy 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 Harum Energy 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 Harum Energy i.e., Harum Energy and Exploitasi Energi go up and down completely randomly.
Pair Corralation between Harum Energy and Exploitasi Energi
Assuming the 90 days trading horizon Harum Energy Tbk is expected to generate 0.36 times more return on investment than Exploitasi Energi. However, Harum Energy Tbk is 2.79 times less risky than Exploitasi Energi. It trades about -0.01 of its potential returns per unit of risk. Exploitasi Energi Indonesia is currently generating about -0.03 per unit of risk. If you would invest 142,000 in Harum Energy Tbk on August 29, 2024 and sell it today you would lose (29,500) from holding Harum Energy Tbk or give up 20.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harum Energy Tbk vs. Exploitasi Energi Indonesia
Performance |
| Timeline |
| Harum Energy Tbk |
| Exploitasi Energi |
Harum Energy and Exploitasi Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harum Energy and Exploitasi Energi
The main advantage of trading using opposite Harum Energy and Exploitasi Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harum Energy 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.| Harum Energy vs. Indo Tambangraya Megah | Harum Energy vs. Indika Energy Tbk | Harum Energy vs. Adaro Energy Tbk | Harum Energy vs. Akr Corporindo 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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