Correlation Between Rukun Raharja and Energi Mega
Can any of the company-specific risk be diversified away by investing in both Rukun Raharja and Energi Mega 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 Rukun Raharja and Energi Mega into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rukun Raharja Tbk and Energi Mega Persada, you can compare the effects of market volatilities on Rukun Raharja and Energi Mega 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 Rukun Raharja with a short position of Energi Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rukun Raharja and Energi Mega.
Diversification Opportunities for Rukun Raharja and Energi Mega
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rukun and Energi is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Rukun Raharja Tbk and Energi Mega Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energi Mega Persada and Rukun Raharja 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 Rukun Raharja Tbk are associated (or correlated) with Energi Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energi Mega Persada has no effect on the direction of Rukun Raharja i.e., Rukun Raharja and Energi Mega go up and down completely randomly.
Pair Corralation between Rukun Raharja and Energi Mega
Assuming the 90 days trading horizon Rukun Raharja Tbk is expected to generate 1.23 times more return on investment than Energi Mega. However, Rukun Raharja is 1.23 times more volatile than Energi Mega Persada. It trades about 0.18 of its potential returns per unit of risk. Energi Mega Persada is currently generating about 0.09 per unit of risk. If you would invest 124,500 in Rukun Raharja Tbk on September 2, 2024 and sell it today you would earn a total of 88,500 from holding Rukun Raharja Tbk or generate 71.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rukun Raharja Tbk vs. Energi Mega Persada
Performance |
| Timeline |
| Rukun Raharja Tbk |
| Energi Mega Persada |
Rukun Raharja and Energi Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rukun Raharja and Energi Mega
The main advantage of trading using opposite Rukun Raharja and Energi Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rukun Raharja position performs unexpectedly, Energi Mega 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 Energi Mega will offset losses from the drop in Energi Mega's long position.| Rukun Raharja vs. Mitrabahtera Segara Sejati | Rukun Raharja vs. Weha Transportasi Indonesia | Rukun Raharja vs. Rig Tenders Tbk |
| Energi Mega vs. Mitrabahtera Segara Sejati | Energi Mega vs. Weha Transportasi Indonesia | Energi Mega vs. Rig Tenders 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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