Correlation Between Petrosea Tbk and United Tractors
Can any of the company-specific risk be diversified away by investing in both Petrosea Tbk and United Tractors 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 United Tractors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrosea Tbk and United Tractors Tbk, you can compare the effects of market volatilities on Petrosea Tbk and United Tractors 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 United Tractors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrosea Tbk and United Tractors.
Diversification Opportunities for Petrosea Tbk and United Tractors
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Petrosea and United is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Petrosea Tbk and United Tractors Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Tractors 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 United Tractors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Tractors Tbk has no effect on the direction of Petrosea Tbk i.e., Petrosea Tbk and United Tractors go up and down completely randomly.
Pair Corralation between Petrosea Tbk and United Tractors
Assuming the 90 days trading horizon Petrosea Tbk is expected to generate 1.39 times more return on investment than United Tractors. However, Petrosea Tbk is 1.39 times more volatile than United Tractors Tbk. It trades about 0.16 of its potential returns per unit of risk. United Tractors Tbk is currently generating about -0.06 per unit of risk. If you would invest 1,820,000 in Petrosea Tbk on September 1, 2024 and sell it today you would earn a total of 152,500 from holding Petrosea Tbk or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petrosea Tbk vs. United Tractors Tbk
Performance |
| Timeline |
| Petrosea Tbk |
| United Tractors Tbk |
Petrosea Tbk and United Tractors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrosea Tbk and United Tractors
The main advantage of trading using opposite Petrosea Tbk and United Tractors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrosea Tbk position performs unexpectedly, United Tractors 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 United Tractors will offset losses from the drop in United Tractors' 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 |
| United Tractors vs. Mitrabahtera Segara Sejati | United Tractors vs. Weha Transportasi Indonesia | United Tractors vs. Rig Tenders Tbk | United Tractors vs. Rukun Raharja 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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