Correlation Between Pertamina Geothermal and Aesler Grup
Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal and Aesler Grup 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 Aesler Grup 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 Aesler Grup Internasional, you can compare the effects of market volatilities on Pertamina Geothermal and Aesler Grup 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 Aesler Grup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and Aesler Grup.
Diversification Opportunities for Pertamina Geothermal and Aesler Grup
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pertamina and Aesler is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy and Aesler Grup Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesler Grup Internasional 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 Aesler Grup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesler Grup Internasional has no effect on the direction of Pertamina Geothermal i.e., Pertamina Geothermal and Aesler Grup go up and down completely randomly.
Pair Corralation between Pertamina Geothermal and Aesler Grup
Assuming the 90 days trading horizon Pertamina Geothermal is expected to generate 2.23 times less return on investment than Aesler Grup. But when comparing it to its historical volatility, Pertamina Geothermal Energy is 1.75 times less risky than Aesler Grup. It trades about 0.03 of its potential returns per unit of risk. Aesler Grup Internasional is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 80,000 in Aesler Grup Internasional on September 12, 2024 and sell it today you would earn a total of 20,500 from holding Aesler Grup Internasional or generate 25.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.08% |
| Values | Daily Returns |
Pertamina Geothermal Energy vs. Aesler Grup Internasional
Performance |
| Timeline |
| Pertamina Geothermal |
| Aesler Grup Internasional |
Pertamina Geothermal and Aesler Grup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pertamina Geothermal and Aesler Grup
The main advantage of trading using opposite Pertamina Geothermal and Aesler Grup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pertamina Geothermal position performs unexpectedly, Aesler Grup 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 Aesler Grup will offset losses from the drop in Aesler Grup's long position.| Pertamina Geothermal vs. Bank Central Asia | Pertamina Geothermal vs. Bank Rakyat Indonesia | Pertamina Geothermal vs. Bayan Resources Tbk | Pertamina Geothermal vs. Bank Mandiri Persero |
| Aesler Grup vs. Siloam International Hospitals | Aesler Grup vs. Hoffmen Cleanindo | Aesler Grup vs. First Media Tbk | Aesler Grup vs. City Retail Developments |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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