Correlation Between PT Kusuma and RMK Energy
Can any of the company-specific risk be diversified away by investing in both PT Kusuma and RMK Energy 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 PT Kusuma and RMK Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Kusuma Kemindo and RMK Energy PT, you can compare the effects of market volatilities on PT Kusuma 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 PT Kusuma with a short position of RMK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Kusuma and RMK Energy.
Diversification Opportunities for PT Kusuma and RMK Energy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KKES and RMK is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Kusuma Kemindo 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 PT Kusuma 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 PT Kusuma Kemindo 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 PT Kusuma i.e., PT Kusuma and RMK Energy go up and down completely randomly.
Pair Corralation between PT Kusuma and RMK Energy
Assuming the 90 days trading horizon PT Kusuma Kemindo is expected to under-perform the RMK Energy. In addition to that, PT Kusuma is 1.24 times more volatile than RMK Energy PT. It trades about -0.1 of its total potential returns per unit of risk. RMK Energy PT is currently generating about -0.11 per unit of volatility. If you would invest 58,500 in RMK Energy PT on August 30, 2024 and sell it today you would lose (6,500) from holding RMK Energy PT or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Kusuma Kemindo vs. RMK Energy PT
Performance |
| Timeline |
| PT Kusuma Kemindo |
| RMK Energy PT |
PT Kusuma and RMK Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Kusuma and RMK Energy
The main advantage of trading using opposite PT Kusuma and RMK Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Kusuma 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.| PT Kusuma vs. PT Dewi Shri | PT Kusuma vs. PT Cilacap Samudera | PT Kusuma vs. PT Arkora Hydro | PT Kusuma vs. Habco Trans Maritima |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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