Correlation Between Asia Pacific and Exploitasi Energi
Can any of the company-specific risk be diversified away by investing in both Asia Pacific and Exploitasi Energi 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 Asia Pacific and Exploitasi Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Pacific Fibers and Exploitasi Energi Indonesia, you can compare the effects of market volatilities on Asia Pacific and Exploitasi Energi 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 Asia Pacific with a short position of Exploitasi Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Pacific and Exploitasi Energi.
Diversification Opportunities for Asia Pacific and Exploitasi Energi
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asia and Exploitasi is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pacific Fibers and Exploitasi Energi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exploitasi Energi and Asia Pacific 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 Asia Pacific Fibers are associated (or correlated) with Exploitasi Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exploitasi Energi has no effect on the direction of Asia Pacific i.e., Asia Pacific and Exploitasi Energi go up and down completely randomly.
Pair Corralation between Asia Pacific and Exploitasi Energi
Assuming the 90 days trading horizon Asia Pacific Fibers is expected to under-perform the Exploitasi Energi. But the stock apears to be less risky and, when comparing its historical volatility, Asia Pacific Fibers is 2.15 times less risky than Exploitasi Energi. The stock trades about -0.07 of its potential returns per unit of risk. The Exploitasi Energi Indonesia is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Exploitasi Energi Indonesia on August 25, 2024 and sell it today you would lose (4,300) from holding Exploitasi Energi Indonesia or give up 86.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Pacific Fibers vs. Exploitasi Energi Indonesia
Performance |
| Timeline |
| Asia Pacific Fibers |
| Exploitasi Energi |
Asia Pacific and Exploitasi Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Pacific and Exploitasi Energi
The main advantage of trading using opposite Asia Pacific and Exploitasi Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Pacific position performs unexpectedly, Exploitasi Energi 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 Exploitasi Energi will offset losses from the drop in Exploitasi Energi's long position.| Asia Pacific vs. PT Sreeya Sewu | Asia Pacific vs. Multistrada Arah Sarana | Asia Pacific vs. Polychem Indonesia Tbk | Asia Pacific vs. Pan Brothers Tbk |
| Exploitasi Energi vs. Petrosea Tbk | Exploitasi Energi vs. Harum Energy Tbk | Exploitasi Energi vs. Perdana Karya Perkasa | Exploitasi Energi vs. Samindo Resources Tbk |
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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