Correlation Between IDX 30 and RMK Energy
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By analyzing existing cross correlation between IDX 30 Jakarta and RMK Energy PT, you can compare the effects of market volatilities on IDX 30 and RMK Energy 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 IDX 30 with a short position of RMK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDX 30 and RMK Energy.
Diversification Opportunities for IDX 30 and RMK Energy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IDX and RMK is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding IDX 30 Jakarta and RMK Energy PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMK Energy PT and IDX 30 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 IDX 30 Jakarta are associated (or correlated) with RMK Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMK Energy PT has no effect on the direction of IDX 30 i.e., IDX 30 and RMK Energy go up and down completely randomly.
Pair Corralation between IDX 30 and RMK Energy
Assuming the 90 days trading horizon IDX 30 Jakarta is expected to under-perform the RMK Energy. But the index apears to be less risky and, when comparing its historical volatility, IDX 30 Jakarta is 2.71 times less risky than RMK Energy. The index trades about -0.27 of its potential returns per unit of risk. The RMK Energy PT is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 53,500 in RMK Energy PT on August 29, 2024 and sell it today you would lose (1,500) from holding RMK Energy PT or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDX 30 Jakarta vs. RMK Energy PT
Performance |
| Timeline |
IDX 30 and RMK Energy Volatility Contrast
Predicted Return Density |
| Returns |
IDX 30 Jakarta
Pair trading matchups for IDX 30
RMK Energy PT
Pair trading matchups for RMK Energy
Pair Trading with IDX 30 and RMK Energy
The main advantage of trading using opposite IDX 30 and RMK Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDX 30 position performs unexpectedly, RMK Energy 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 RMK Energy will offset losses from the drop in RMK Energy's long position.| IDX 30 vs. Trinitan Metals and | IDX 30 vs. Lotte Chemical Titan | IDX 30 vs. Metro Healthcare Indonesia | IDX 30 vs. HK Metals Utama |
| RMK Energy vs. Adaro Minerals Indonesia | RMK Energy vs. Prima Andalan Mandiri | RMK Energy vs. Sumber Global Energy | RMK Energy vs. Golden Eagle Energy |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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