Correlation Between Petrosea Tbk and Benakat Petroleum
Can any of the company-specific risk be diversified away by investing in both Petrosea Tbk 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 Petrosea Tbk and Benakat Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrosea Tbk and Benakat Petroleum Energy, you can compare the effects of market volatilities on Petrosea Tbk 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 Petrosea Tbk with a short position of Benakat Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrosea Tbk and Benakat Petroleum.
Diversification Opportunities for Petrosea Tbk and Benakat Petroleum
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Petrosea and Benakat is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Petrosea Tbk 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 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 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 Petrosea Tbk i.e., Petrosea Tbk and Benakat Petroleum go up and down completely randomly.
Pair Corralation between Petrosea Tbk and Benakat Petroleum
Assuming the 90 days trading horizon Petrosea Tbk is expected to generate 1.16 times more return on investment than Benakat Petroleum. However, Petrosea Tbk is 1.16 times more volatile than Benakat Petroleum Energy. It trades about 0.1 of its potential returns per unit of risk. Benakat Petroleum Energy is currently generating about -0.03 per unit of risk. If you would invest 369,995 in Petrosea Tbk on August 24, 2024 and sell it today you would earn a total of 1,532,505 from holding Petrosea Tbk or generate 414.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Petrosea Tbk vs. Benakat Petroleum Energy
Performance |
| Timeline |
| Petrosea Tbk |
| Benakat Petroleum Energy |
Petrosea Tbk and Benakat Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrosea Tbk and Benakat Petroleum
The main advantage of trading using opposite Petrosea Tbk and Benakat Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrosea Tbk 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.| Petrosea Tbk vs. Kedaung Indah Can | Petrosea Tbk vs. Langgeng Makmur Industri | Petrosea Tbk vs. Kabelindo Murni Tbk | Petrosea Tbk vs. Mustika Ratu Tbk |
| Benakat Petroleum vs. Petrosea Tbk | Benakat Petroleum vs. Harum Energy Tbk | Benakat Petroleum vs. Perdana Karya Perkasa | Benakat Petroleum 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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