Correlation Between Pudjiadi Sons and RMK Energy
Can any of the company-specific risk be diversified away by investing in both Pudjiadi Sons and RMK Energy 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 Pudjiadi Sons and RMK Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pudjiadi Sons Tbk and RMK Energy PT, you can compare the effects of market volatilities on Pudjiadi Sons and RMK Energy 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 Pudjiadi Sons with a short position of RMK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pudjiadi Sons and RMK Energy.
Diversification Opportunities for Pudjiadi Sons and RMK Energy
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pudjiadi and RMK is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pudjiadi Sons Tbk and RMK Energy PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMK Energy PT and Pudjiadi Sons 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 Pudjiadi Sons Tbk are associated (or correlated) with RMK Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMK Energy PT has no effect on the direction of Pudjiadi Sons i.e., Pudjiadi Sons and RMK Energy go up and down completely randomly.
Pair Corralation between Pudjiadi Sons and RMK Energy
Assuming the 90 days trading horizon Pudjiadi Sons Tbk is expected to generate 2.42 times more return on investment than RMK Energy. However, Pudjiadi Sons is 2.42 times more volatile than RMK Energy PT. It trades about 0.18 of its potential returns per unit of risk. RMK Energy PT is currently generating about 0.02 per unit of risk. If you would invest 44,800 in Pudjiadi Sons Tbk on August 29, 2024 and sell it today you would earn a total of 91,200 from holding Pudjiadi Sons Tbk or generate 203.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pudjiadi Sons Tbk vs. RMK Energy PT
Performance |
| Timeline |
| Pudjiadi Sons Tbk |
| RMK Energy PT |
Pudjiadi Sons and RMK Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pudjiadi Sons and RMK Energy
The main advantage of trading using opposite Pudjiadi Sons and RMK Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pudjiadi Sons position performs unexpectedly, RMK Energy 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 RMK Energy will offset losses from the drop in RMK Energy's long position.| Pudjiadi Sons vs. Pembangunan Jaya Ancol | Pudjiadi Sons vs. Panorama Sentrawisata Tbk | Pudjiadi Sons vs. Millennium Pharmacon International | Pudjiadi Sons vs. Tempo Inti Media |
| RMK Energy vs. Adaro Minerals Indonesia | RMK Energy vs. Prima Andalan Mandiri | RMK Energy vs. Sumber Global Energy | RMK Energy vs. Golden Eagle Energy |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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