Correlation Between Rukun Raharja and Protech Mitra
Can any of the company-specific risk be diversified away by investing in both Rukun Raharja and Protech Mitra 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 Protech Mitra 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 Protech Mitra Perkasa, you can compare the effects of market volatilities on Rukun Raharja and Protech Mitra 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 Protech Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rukun Raharja and Protech Mitra.
Diversification Opportunities for Rukun Raharja and Protech Mitra
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rukun and Protech is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Rukun Raharja Tbk and Protech Mitra Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protech Mitra Perkasa 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 Protech Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protech Mitra Perkasa has no effect on the direction of Rukun Raharja i.e., Rukun Raharja and Protech Mitra go up and down completely randomly.
Pair Corralation between Rukun Raharja and Protech Mitra
Assuming the 90 days trading horizon Rukun Raharja Tbk is expected to generate 3.46 times more return on investment than Protech Mitra. However, Rukun Raharja is 3.46 times more volatile than Protech Mitra Perkasa. It trades about 0.18 of its potential returns per unit of risk. Protech Mitra Perkasa is currently generating about -0.04 per unit of risk. If you would invest 170,000 in Rukun Raharja Tbk on August 31, 2024 and sell it today you would earn a total of 43,000 from holding Rukun Raharja Tbk or generate 25.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rukun Raharja Tbk vs. Protech Mitra Perkasa
Performance |
| Timeline |
| Rukun Raharja Tbk |
| Protech Mitra Perkasa |
Rukun Raharja and Protech Mitra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rukun Raharja and Protech Mitra
The main advantage of trading using opposite Rukun Raharja and Protech Mitra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rukun Raharja position performs unexpectedly, Protech Mitra 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 Protech Mitra will offset losses from the drop in Protech Mitra's long position.| Rukun Raharja vs. Nusantara Infrastructure Tbk | Rukun Raharja vs. Panin Financial Tbk | Rukun Raharja vs. Ramayana Lestari Sentosa | Rukun Raharja vs. Kawasan Industri Jababeka |
| Protech Mitra vs. Matahari Department Store | Protech Mitra vs. Multi Medika Internasional | Protech Mitra vs. Visi Media Asia | Protech Mitra vs. Bayan Resources 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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