Correlation Between Harum Energy and Petrosea Tbk
Can any of the company-specific risk be diversified away by investing in both Harum Energy and Petrosea 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 Petrosea 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 Petrosea Tbk, you can compare the effects of market volatilities on Harum Energy and Petrosea 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 Petrosea Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harum Energy and Petrosea Tbk.
Diversification Opportunities for Harum Energy and Petrosea Tbk
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Harum and Petrosea is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Harum Energy Tbk and Petrosea Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrosea 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 Petrosea Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrosea Tbk has no effect on the direction of Harum Energy i.e., Harum Energy and Petrosea Tbk go up and down completely randomly.
Pair Corralation between Harum Energy and Petrosea Tbk
Assuming the 90 days trading horizon Harum Energy Tbk is expected to under-perform the Petrosea Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Harum Energy Tbk is 1.43 times less risky than Petrosea Tbk. The stock trades about -0.21 of its potential returns per unit of risk. The Petrosea Tbk is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,630,000 in Petrosea Tbk on August 28, 2024 and sell it today you would earn a total of 272,500 from holding Petrosea Tbk or generate 16.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harum Energy Tbk vs. Petrosea Tbk
Performance |
| Timeline |
| Harum Energy Tbk |
| Petrosea Tbk |
Harum Energy and Petrosea Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harum Energy and Petrosea Tbk
The main advantage of trading using opposite Harum Energy and Petrosea Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harum Energy position performs unexpectedly, Petrosea 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 Petrosea Tbk will offset losses from the drop in Petrosea 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 |
| Petrosea Tbk vs. Kedaung Indah Can | Petrosea Tbk vs. Langgeng Makmur Industri | Petrosea Tbk vs. Kabelindo Murni Tbk | Petrosea Tbk vs. Mustika Ratu 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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