Correlation Between Pertamina Geothermal and Capital Financial
Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal and Capital Financial 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 Capital Financial 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 Capital Financial Indonesia, you can compare the effects of market volatilities on Pertamina Geothermal and Capital Financial 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 Capital Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and Capital Financial.
Diversification Opportunities for Pertamina Geothermal and Capital Financial
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pertamina and Capital is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy and Capital Financial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial 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 Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Pertamina Geothermal i.e., Pertamina Geothermal and Capital Financial go up and down completely randomly.
Pair Corralation between Pertamina Geothermal and Capital Financial
Assuming the 90 days trading horizon Pertamina Geothermal Energy is expected to generate 1.19 times more return on investment than Capital Financial. However, Pertamina Geothermal is 1.19 times more volatile than Capital Financial Indonesia. It trades about 0.02 of its potential returns per unit of risk. Capital Financial Indonesia is currently generating about 0.01 per unit of risk. If you would invest 81,498 in Pertamina Geothermal Energy on November 27, 2024 and sell it today you would earn a total of 12,502 from holding Pertamina Geothermal Energy or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pertamina Geothermal Energy vs. Capital Financial Indonesia
Performance |
| Timeline |
| Pertamina Geothermal |
| Capital Financial |
Pertamina Geothermal and Capital Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pertamina Geothermal and Capital Financial
The main advantage of trading using opposite Pertamina Geothermal and Capital Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pertamina Geothermal position performs unexpectedly, Capital Financial 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 Capital Financial will offset losses from the drop in Capital Financial's long position.| Pertamina Geothermal vs. City Retail Developments | Pertamina Geothermal vs. Humpuss Intermoda Transportasi | Pertamina Geothermal vs. Protech Mitra Perkasa | Pertamina Geothermal vs. Global Mediacom Tbk |
| Capital Financial vs. Pacific Strategic Financial | Capital Financial vs. Bk Harda Internasional | Capital Financial vs. Indoritel Makmur Internasional | Capital Financial vs. Bank Sinarmas 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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