Correlation Between Resource Alam and Rukun Raharja
Can any of the company-specific risk be diversified away by investing in both Resource Alam and Rukun Raharja 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 Resource Alam and Rukun Raharja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource Alam Indonesia and Rukun Raharja Tbk, you can compare the effects of market volatilities on Resource Alam and Rukun Raharja 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 Resource Alam with a short position of Rukun Raharja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource Alam and Rukun Raharja.
Diversification Opportunities for Resource Alam and Rukun Raharja
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Resource and Rukun is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Resource Alam Indonesia and Rukun Raharja Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rukun Raharja Tbk and Resource Alam 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 Resource Alam Indonesia are associated (or correlated) with Rukun Raharja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rukun Raharja Tbk has no effect on the direction of Resource Alam i.e., Resource Alam and Rukun Raharja go up and down completely randomly.
Pair Corralation between Resource Alam and Rukun Raharja
Assuming the 90 days trading horizon Resource Alam Indonesia is expected to under-perform the Rukun Raharja. But the stock apears to be less risky and, when comparing its historical volatility, Resource Alam Indonesia is 3.29 times less risky than Rukun Raharja. The stock trades about -0.21 of its potential returns per unit of risk. The Rukun Raharja Tbk is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 180,500 in Rukun Raharja Tbk on September 1, 2024 and sell it today you would earn a total of 32,500 from holding Rukun Raharja Tbk or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Resource Alam Indonesia vs. Rukun Raharja Tbk
Performance |
| Timeline |
| Resource Alam Indonesia |
| Rukun Raharja Tbk |
Resource Alam and Rukun Raharja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resource Alam and Rukun Raharja
The main advantage of trading using opposite Resource Alam and Rukun Raharja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource Alam position performs unexpectedly, Rukun Raharja 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 Rukun Raharja will offset losses from the drop in Rukun Raharja's long position.| Resource Alam vs. Petrosea Tbk | Resource Alam vs. Harum Energy Tbk | Resource Alam vs. Perdana Karya Perkasa | Resource Alam vs. Bayan Resources Tbk |
| Rukun Raharja vs. Nusantara Infrastructure Tbk | Rukun Raharja vs. Panin Financial Tbk | Rukun Raharja vs. Ramayana Lestari Sentosa | Rukun Raharja vs. Kawasan Industri Jababeka |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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