Correlation Between Petrosea Tbk and Kencana Energi
Can any of the company-specific risk be diversified away by investing in both Petrosea Tbk and Kencana 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 Petrosea Tbk and Kencana Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrosea Tbk and Kencana Energi Lestari, you can compare the effects of market volatilities on Petrosea Tbk and Kencana 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 Petrosea Tbk with a short position of Kencana Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrosea Tbk and Kencana Energi.
Diversification Opportunities for Petrosea Tbk and Kencana Energi
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petrosea and Kencana is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Petrosea Tbk and Kencana Energi Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kencana Energi Lestari 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 Kencana Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kencana Energi Lestari has no effect on the direction of Petrosea Tbk i.e., Petrosea Tbk and Kencana Energi go up and down completely randomly.
Pair Corralation between Petrosea Tbk and Kencana Energi
Assuming the 90 days trading horizon Petrosea Tbk is expected to generate 2.44 times more return on investment than Kencana Energi. However, Petrosea Tbk is 2.44 times more volatile than Kencana Energi Lestari. It trades about 0.26 of its potential returns per unit of risk. Kencana Energi Lestari is currently generating about -0.11 per unit of risk. If you would invest 1,667,500 in Petrosea Tbk on August 31, 2024 and sell it today you would earn a total of 305,000 from holding Petrosea Tbk or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Petrosea Tbk vs. Kencana Energi Lestari
Performance |
| Timeline |
| Petrosea Tbk |
| Kencana Energi Lestari |
Petrosea Tbk and Kencana Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrosea Tbk and Kencana Energi
The main advantage of trading using opposite Petrosea Tbk and Kencana Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrosea Tbk position performs unexpectedly, Kencana 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 Kencana Energi will offset losses from the drop in Kencana Energi'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 |
| Kencana Energi vs. PT Indonesia Kendaraan | Kencana Energi vs. Cikarang Listrindo Tbk | Kencana Energi vs. Jasa Armada Indonesia | Kencana Energi vs. Pelita Samudera Shipping |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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