Correlation Between Rig Tenders and Benakat Petroleum
Can any of the company-specific risk be diversified away by investing in both Rig Tenders and Benakat Petroleum 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 Rig Tenders and Benakat Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rig Tenders Tbk and Benakat Petroleum Energy, you can compare the effects of market volatilities on Rig Tenders and Benakat Petroleum 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 Rig Tenders with a short position of Benakat Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rig Tenders and Benakat Petroleum.
Diversification Opportunities for Rig Tenders and Benakat Petroleum
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rig and Benakat is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Rig Tenders Tbk and Benakat Petroleum Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benakat Petroleum Energy and Rig Tenders 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 Rig Tenders Tbk are associated (or correlated) with Benakat Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benakat Petroleum Energy has no effect on the direction of Rig Tenders i.e., Rig Tenders and Benakat Petroleum go up and down completely randomly.
Pair Corralation between Rig Tenders and Benakat Petroleum
Assuming the 90 days trading horizon Rig Tenders Tbk is expected to generate 0.7 times more return on investment than Benakat Petroleum. However, Rig Tenders Tbk is 1.42 times less risky than Benakat Petroleum. It trades about 0.03 of its potential returns per unit of risk. Benakat Petroleum Energy is currently generating about -0.02 per unit of risk. If you would invest 49,800 in Rig Tenders Tbk on August 31, 2024 and sell it today you would earn a total of 10,200 from holding Rig Tenders Tbk or generate 20.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Rig Tenders Tbk vs. Benakat Petroleum Energy
Performance |
| Timeline |
| Rig Tenders Tbk |
| Benakat Petroleum Energy |
Rig Tenders and Benakat Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rig Tenders and Benakat Petroleum
The main advantage of trading using opposite Rig Tenders and Benakat Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rig Tenders position performs unexpectedly, Benakat Petroleum 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 Benakat Petroleum will offset losses from the drop in Benakat Petroleum's long position.| Rig Tenders vs. Samudera Indonesia Tbk | Rig Tenders vs. Steady Safe TBK | Rig Tenders vs. Rukun Raharja Tbk | Rig Tenders vs. PT Temas Tbk |
| Benakat Petroleum vs. Mitrabahtera Segara Sejati | Benakat Petroleum vs. Weha Transportasi Indonesia | Benakat Petroleum vs. Rig Tenders Tbk | Benakat Petroleum 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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