Correlation Between Mitrabara Adiperdana and RMK Energy
Can any of the company-specific risk be diversified away by investing in both Mitrabara Adiperdana 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 Mitrabara Adiperdana and RMK Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitrabara Adiperdana PT and RMK Energy PT, you can compare the effects of market volatilities on Mitrabara Adiperdana 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 Mitrabara Adiperdana with a short position of RMK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitrabara Adiperdana and RMK Energy.
Diversification Opportunities for Mitrabara Adiperdana and RMK Energy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mitrabara and RMK is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mitrabara Adiperdana PT 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 Mitrabara Adiperdana 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 Mitrabara Adiperdana PT 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 Mitrabara Adiperdana i.e., Mitrabara Adiperdana and RMK Energy go up and down completely randomly.
Pair Corralation between Mitrabara Adiperdana and RMK Energy
Assuming the 90 days trading horizon Mitrabara Adiperdana PT is expected to under-perform the RMK Energy. But the stock apears to be less risky and, when comparing its historical volatility, Mitrabara Adiperdana PT is 2.47 times less risky than RMK Energy. The stock trades about -0.42 of its potential returns per unit of risk. The RMK Energy PT is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 53,500 in RMK Energy PT on August 26, 2024 and sell it today you would lose (2,500) from holding RMK Energy PT or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mitrabara Adiperdana PT vs. RMK Energy PT
Performance |
| Timeline |
| Mitrabara Adiperdana |
| RMK Energy PT |
Mitrabara Adiperdana and RMK Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitrabara Adiperdana and RMK Energy
The main advantage of trading using opposite Mitrabara Adiperdana and RMK Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitrabara Adiperdana 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.| Mitrabara Adiperdana vs. Baramulti Suksessarana Tbk | Mitrabara Adiperdana vs. Samindo Resources Tbk | Mitrabara Adiperdana vs. Hexindo Adiperkasa Tbk | Mitrabara Adiperdana vs. Mitra Pinasthika Mustika |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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