Correlation Between Petrosea Tbk and Archi Indonesia
Can any of the company-specific risk be diversified away by investing in both Petrosea Tbk and Archi Indonesia 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 Petrosea Tbk and Archi Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrosea Tbk and Archi Indonesia Tbk, you can compare the effects of market volatilities on Petrosea Tbk and Archi Indonesia 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 Petrosea Tbk with a short position of Archi Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrosea Tbk and Archi Indonesia.
Diversification Opportunities for Petrosea Tbk and Archi Indonesia
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petrosea and Archi is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Petrosea Tbk and Archi Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archi Indonesia Tbk and Petrosea Tbk 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 Petrosea Tbk are associated (or correlated) with Archi Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archi Indonesia Tbk has no effect on the direction of Petrosea Tbk i.e., Petrosea Tbk and Archi Indonesia go up and down completely randomly.
Pair Corralation between Petrosea Tbk and Archi Indonesia
Assuming the 90 days trading horizon Petrosea Tbk is expected to generate 1.26 times more return on investment than Archi Indonesia. However, Petrosea Tbk is 1.26 times more volatile than Archi Indonesia Tbk. It trades about 0.17 of its potential returns per unit of risk. Archi Indonesia Tbk is currently generating about -0.22 per unit of risk. If you would invest 1,680,000 in Petrosea Tbk on August 30, 2024 and sell it today you would earn a total of 182,500 from holding Petrosea Tbk or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrosea Tbk vs. Archi Indonesia Tbk
Performance |
| Timeline |
| Petrosea Tbk |
| Archi Indonesia Tbk |
Petrosea Tbk and Archi Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrosea Tbk and Archi Indonesia
The main advantage of trading using opposite Petrosea Tbk and Archi Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrosea Tbk position performs unexpectedly, Archi Indonesia 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 Archi Indonesia will offset losses from the drop in Archi Indonesia's long position.| Petrosea Tbk vs. Indika Energy Tbk | Petrosea Tbk vs. Harum Energy Tbk | Petrosea Tbk vs. Indo Tambangraya Megah | Petrosea Tbk vs. Gajah Tunggal Tbk |
| Archi Indonesia vs. Triputra Agro Persada | Archi Indonesia vs. Berkah Beton Sadaya | Archi Indonesia vs. PAM Mineral Tbk | Archi Indonesia vs. PT Bukalapak |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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