Correlation Between Pertamina Geothermal and Hoffmen Cleanindo
Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal and Hoffmen Cleanindo 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 Hoffmen Cleanindo 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 Hoffmen Cleanindo, you can compare the effects of market volatilities on Pertamina Geothermal and Hoffmen Cleanindo 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 Hoffmen Cleanindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and Hoffmen Cleanindo.
Diversification Opportunities for Pertamina Geothermal and Hoffmen Cleanindo
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pertamina and Hoffmen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy and Hoffmen Cleanindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoffmen Cleanindo 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 Hoffmen Cleanindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoffmen Cleanindo has no effect on the direction of Pertamina Geothermal i.e., Pertamina Geothermal and Hoffmen Cleanindo go up and down completely randomly.
Pair Corralation between Pertamina Geothermal and Hoffmen Cleanindo
Assuming the 90 days trading horizon Pertamina Geothermal Energy is expected to generate 0.7 times more return on investment than Hoffmen Cleanindo. However, Pertamina Geothermal Energy is 1.43 times less risky than Hoffmen Cleanindo. It trades about -0.28 of its potential returns per unit of risk. Hoffmen Cleanindo is currently generating about -0.21 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pertamina Geothermal Energy vs. Hoffmen Cleanindo
Performance |
| Timeline |
| Pertamina Geothermal |
| Hoffmen Cleanindo |
Pertamina Geothermal and Hoffmen Cleanindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pertamina Geothermal and Hoffmen Cleanindo
The main advantage of trading using opposite Pertamina Geothermal and Hoffmen Cleanindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pertamina Geothermal position performs unexpectedly, Hoffmen Cleanindo 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 Hoffmen Cleanindo will offset losses from the drop in Hoffmen Cleanindo'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 |
| Hoffmen Cleanindo vs. Bank Central Asia | Hoffmen Cleanindo vs. Bank Rakyat Indonesia | Hoffmen Cleanindo vs. Bayan Resources Tbk | Hoffmen Cleanindo vs. Bank Mandiri Persero |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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