Correlation Between Pertamina Geothermal and FKS Food
Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal and FKS Food 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 Pertamina Geothermal and FKS Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pertamina Geothermal Energy and FKS Food Sejahtera, you can compare the effects of market volatilities on Pertamina Geothermal and FKS Food 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 Pertamina Geothermal with a short position of FKS Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and FKS Food.
Diversification Opportunities for Pertamina Geothermal and FKS Food
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pertamina and FKS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy and FKS Food Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FKS Food Sejahtera and Pertamina Geothermal 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 Pertamina Geothermal Energy are associated (or correlated) with FKS Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FKS Food Sejahtera has no effect on the direction of Pertamina Geothermal i.e., Pertamina Geothermal and FKS Food go up and down completely randomly.
Pair Corralation between Pertamina Geothermal and FKS Food
Assuming the 90 days trading horizon Pertamina Geothermal Energy is expected to generate 1.57 times more return on investment than FKS Food. However, Pertamina Geothermal is 1.57 times more volatile than FKS Food Sejahtera. It trades about -0.28 of its potential returns per unit of risk. FKS Food Sejahtera is currently generating about -0.48 per unit of risk. If you would invest 109,000 in Pertamina Geothermal Energy on September 1, 2024 and sell it today you would lose (10,000) from holding Pertamina Geothermal Energy or give up 9.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pertamina Geothermal Energy vs. FKS Food Sejahtera
Performance |
| Timeline |
| Pertamina Geothermal |
| FKS Food Sejahtera |
Pertamina Geothermal and FKS Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pertamina Geothermal and FKS Food
The main advantage of trading using opposite Pertamina Geothermal and FKS Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pertamina Geothermal position performs unexpectedly, FKS Food 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 FKS Food will offset losses from the drop in FKS Food's long position.| Pertamina Geothermal vs. Ashmore Asset Management | Pertamina Geothermal vs. HK Metals Utama | Pertamina Geothermal vs. Lotte Chemical Titan | Pertamina Geothermal vs. Diamond Food Indonesia |
| FKS Food vs. Bank BRISyariah Tbk | FKS Food vs. Mitra Pinasthika Mustika | FKS Food vs. Jakarta Int Hotels | FKS Food vs. Indosterling Technomedia 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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