Correlation Between Petrosea Tbk and Rukun Raharja
Can any of the company-specific risk be diversified away by investing in both Petrosea Tbk and Rukun Raharja 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 Rukun Raharja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrosea Tbk and Rukun Raharja Tbk, you can compare the effects of market volatilities on Petrosea Tbk and Rukun Raharja 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 Rukun Raharja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrosea Tbk and Rukun Raharja.
Diversification Opportunities for Petrosea Tbk and Rukun Raharja
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Petrosea and Rukun is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Petrosea Tbk and Rukun Raharja Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rukun Raharja 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 Rukun Raharja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rukun Raharja Tbk has no effect on the direction of Petrosea Tbk i.e., Petrosea Tbk and Rukun Raharja go up and down completely randomly.
Pair Corralation between Petrosea Tbk and Rukun Raharja
Assuming the 90 days trading horizon Petrosea Tbk is expected to generate 2.43 times less return on investment than Rukun Raharja. But when comparing it to its historical volatility, Petrosea Tbk is 2.33 times less risky than Rukun Raharja. It trades about 0.22 of its potential returns per unit of risk. Rukun Raharja Tbk is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 173,500 in Rukun Raharja Tbk on August 29, 2024 and sell it today you would earn a total of 60,500 from holding Rukun Raharja Tbk or generate 34.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrosea Tbk vs. Rukun Raharja Tbk
Performance |
| Timeline |
| Petrosea Tbk |
| Rukun Raharja Tbk |
Petrosea Tbk and Rukun Raharja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrosea Tbk and Rukun Raharja
The main advantage of trading using opposite Petrosea Tbk and Rukun Raharja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrosea Tbk position performs unexpectedly, Rukun Raharja 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 Rukun Raharja will offset losses from the drop in Rukun Raharja'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 |
| Rukun Raharja vs. Nusantara Infrastructure Tbk | Rukun Raharja vs. Panin Financial Tbk | Rukun Raharja vs. Ramayana Lestari Sentosa | Rukun Raharja vs. Kawasan Industri Jababeka |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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