Correlation Between Perdana Karya and Benakat Petroleum
Can any of the company-specific risk be diversified away by investing in both Perdana Karya and Benakat Petroleum 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 Perdana Karya and Benakat Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perdana Karya Perkasa and Benakat Petroleum Energy, you can compare the effects of market volatilities on Perdana Karya and Benakat Petroleum 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 Perdana Karya with a short position of Benakat Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perdana Karya and Benakat Petroleum.
Diversification Opportunities for Perdana Karya and Benakat Petroleum
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perdana and Benakat is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Perdana Karya Perkasa and Benakat Petroleum Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benakat Petroleum Energy and Perdana Karya 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 Perdana Karya Perkasa are associated (or correlated) with Benakat Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benakat Petroleum Energy has no effect on the direction of Perdana Karya i.e., Perdana Karya and Benakat Petroleum go up and down completely randomly.
Pair Corralation between Perdana Karya and Benakat Petroleum
Assuming the 90 days trading horizon Perdana Karya Perkasa is expected to generate 0.89 times more return on investment than Benakat Petroleum. However, Perdana Karya Perkasa is 1.12 times less risky than Benakat Petroleum. It trades about 0.11 of its potential returns per unit of risk. Benakat Petroleum Energy is currently generating about -0.02 per unit of risk. If you would invest 35,400 in Perdana Karya Perkasa on August 24, 2024 and sell it today you would earn a total of 47,100 from holding Perdana Karya Perkasa or generate 133.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Perdana Karya Perkasa vs. Benakat Petroleum Energy
Performance |
Timeline |
Perdana Karya Perkasa |
Benakat Petroleum Energy |
Perdana Karya and Benakat Petroleum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Perdana Karya and Benakat Petroleum
The main advantage of trading using opposite Perdana Karya and Benakat Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perdana Karya position performs unexpectedly, Benakat Petroleum 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 Benakat Petroleum will offset losses from the drop in Benakat Petroleum's long position.Perdana Karya vs. Radiant Utama Interinsco | Perdana Karya vs. Resource Alam Indonesia | Perdana Karya vs. Exploitasi Energi Indonesia | Perdana Karya vs. Asia Pacific Fibers |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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