Correlation Between Harum Energy and Elnusa Tbk
Can any of the company-specific risk be diversified away by investing in both Harum Energy and Elnusa Tbk 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 Elnusa Tbk 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 Elnusa Tbk, you can compare the effects of market volatilities on Harum Energy and Elnusa Tbk 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 Elnusa Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harum Energy and Elnusa Tbk.
Diversification Opportunities for Harum Energy and Elnusa Tbk
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harum and Elnusa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Harum Energy Tbk and Elnusa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elnusa Tbk 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 Elnusa Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elnusa Tbk has no effect on the direction of Harum Energy i.e., Harum Energy and Elnusa Tbk go up and down completely randomly.
Pair Corralation between Harum Energy and Elnusa Tbk
Assuming the 90 days trading horizon Harum Energy Tbk is expected to under-perform the Elnusa Tbk. In addition to that, Harum Energy is 1.45 times more volatile than Elnusa Tbk. It trades about -0.18 of its total potential returns per unit of risk. Elnusa Tbk is currently generating about -0.2 per unit of volatility. If you would invest 47,200 in Elnusa Tbk on August 31, 2024 and sell it today you would lose (2,800) from holding Elnusa Tbk or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Harum Energy Tbk vs. Elnusa Tbk
Performance |
| Timeline |
| Harum Energy Tbk |
| Elnusa Tbk |
Harum Energy and Elnusa Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harum Energy and Elnusa Tbk
The main advantage of trading using opposite Harum Energy and Elnusa Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harum Energy position performs unexpectedly, Elnusa Tbk 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 Elnusa Tbk will offset losses from the drop in Elnusa Tbk'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 |
| Elnusa Tbk vs. Medco Energi Internasional | Elnusa Tbk vs. Timah Persero Tbk | Elnusa Tbk vs. Vale Indonesia Tbk | Elnusa Tbk vs. Indika Energy 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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