Correlation Between Pertamina Geothermal and Indo Acidatama
Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal and Indo Acidatama 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 Indo Acidatama 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 Indo Acidatama Tbk, you can compare the effects of market volatilities on Pertamina Geothermal and Indo Acidatama 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 Indo Acidatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and Indo Acidatama.
Diversification Opportunities for Pertamina Geothermal and Indo Acidatama
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pertamina and Indo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy and Indo Acidatama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Acidatama Tbk 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 Indo Acidatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Acidatama Tbk has no effect on the direction of Pertamina Geothermal i.e., Pertamina Geothermal and Indo Acidatama go up and down completely randomly.
Pair Corralation between Pertamina Geothermal and Indo Acidatama
Assuming the 90 days trading horizon Pertamina Geothermal Energy is expected to under-perform the Indo Acidatama. In addition to that, Pertamina Geothermal is 1.49 times more volatile than Indo Acidatama Tbk. It trades about -0.28 of its total potential returns per unit of risk. Indo Acidatama Tbk is currently generating about 0.01 per unit of volatility. If you would invest 5,000 in Indo Acidatama Tbk on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Indo Acidatama Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pertamina Geothermal Energy vs. Indo Acidatama Tbk
Performance |
| Timeline |
| Pertamina Geothermal |
| Indo Acidatama Tbk |
Pertamina Geothermal and Indo Acidatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pertamina Geothermal and Indo Acidatama
The main advantage of trading using opposite Pertamina Geothermal and Indo Acidatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pertamina Geothermal position performs unexpectedly, Indo Acidatama 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 Indo Acidatama will offset losses from the drop in Indo Acidatama'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 |
| Indo Acidatama vs. Perusahaan Gas Negara | Indo Acidatama vs. Telkom Indonesia Tbk | Indo Acidatama vs. Mitra Pinasthika Mustika | Indo Acidatama vs. Jakarta Int Hotels |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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