Correlation Between Rukun Raharja and Medco Energi
Can any of the company-specific risk be diversified away by investing in both Rukun Raharja and Medco 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 Rukun Raharja and Medco Energi 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 Medco Energi Internasional, you can compare the effects of market volatilities on Rukun Raharja and Medco 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 Rukun Raharja with a short position of Medco Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rukun Raharja and Medco Energi.
Diversification Opportunities for Rukun Raharja and Medco Energi
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rukun and Medco is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Rukun Raharja Tbk and Medco Energi Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medco Energi Interna 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 Medco Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medco Energi Interna has no effect on the direction of Rukun Raharja i.e., Rukun Raharja and Medco Energi go up and down completely randomly.
Pair Corralation between Rukun Raharja and Medco Energi
Assuming the 90 days trading horizon Rukun Raharja Tbk is expected to generate 1.28 times more return on investment than Medco Energi. However, Rukun Raharja is 1.28 times more volatile than Medco Energi Internasional. It trades about 0.06 of its potential returns per unit of risk. Medco Energi Internasional is currently generating about 0.02 per unit of risk. If you would invest 90,663 in Rukun Raharja Tbk on September 2, 2024 and sell it today you would earn a total of 122,337 from holding Rukun Raharja Tbk or generate 134.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rukun Raharja Tbk vs. Medco Energi Internasional
Performance |
| Timeline |
| Rukun Raharja Tbk |
| Medco Energi Interna |
Rukun Raharja and Medco Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rukun Raharja and Medco Energi
The main advantage of trading using opposite Rukun Raharja and Medco Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rukun Raharja position performs unexpectedly, Medco 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 Medco Energi will offset losses from the drop in Medco Energi's long position.| Rukun Raharja vs. Mitrabahtera Segara Sejati | Rukun Raharja vs. Weha Transportasi Indonesia | Rukun Raharja vs. Rig Tenders Tbk |
| Medco Energi vs. Mitrabahtera Segara Sejati | Medco Energi vs. Weha Transportasi Indonesia | Medco Energi 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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