Correlation Between Medco Energi and Perusahaan Gas
Can any of the company-specific risk be diversified away by investing in both Medco Energi and Perusahaan Gas 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 Medco Energi and Perusahaan Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medco Energi Internasional and Perusahaan Gas Negara, you can compare the effects of market volatilities on Medco Energi and Perusahaan Gas 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 Medco Energi with a short position of Perusahaan Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medco Energi and Perusahaan Gas.
Diversification Opportunities for Medco Energi and Perusahaan Gas
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Medco and Perusahaan is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Medco Energi Internasional and Perusahaan Gas Negara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Gas Negara and Medco Energi 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 Medco Energi Internasional are associated (or correlated) with Perusahaan Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Gas Negara has no effect on the direction of Medco Energi i.e., Medco Energi and Perusahaan Gas go up and down completely randomly.
Pair Corralation between Medco Energi and Perusahaan Gas
Assuming the 90 days trading horizon Medco Energi Internasional is expected to under-perform the Perusahaan Gas. In addition to that, Medco Energi is 1.21 times more volatile than Perusahaan Gas Negara. It trades about -0.11 of its total potential returns per unit of risk. Perusahaan Gas Negara is currently generating about 0.11 per unit of volatility. If you would invest 150,000 in Perusahaan Gas Negara on August 28, 2024 and sell it today you would earn a total of 7,000 from holding Perusahaan Gas Negara or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medco Energi Internasional vs. Perusahaan Gas Negara
Performance |
| Timeline |
| Medco Energi Interna |
| Perusahaan Gas Negara |
Medco Energi and Perusahaan Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medco Energi and Perusahaan Gas
The main advantage of trading using opposite Medco Energi and Perusahaan Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medco Energi position performs unexpectedly, Perusahaan Gas 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 Perusahaan Gas will offset losses from the drop in Perusahaan Gas' long position.| Medco Energi vs. Vale Indonesia Tbk | Medco Energi vs. Timah Persero Tbk | Medco Energi vs. Perusahaan Gas Negara | Medco Energi vs. Bukit Asam Tbk |
| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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