Correlation Between Rig Tenders and Energi Mega
Can any of the company-specific risk be diversified away by investing in both Rig Tenders 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 Rig Tenders and Energi Mega 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 Energi Mega Persada, you can compare the effects of market volatilities on Rig Tenders 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 Rig Tenders with a short position of Energi Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rig Tenders and Energi Mega.
Diversification Opportunities for Rig Tenders and Energi Mega
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rig and Energi is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Rig Tenders 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 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 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 Rig Tenders i.e., Rig Tenders and Energi Mega go up and down completely randomly.
Pair Corralation between Rig Tenders and Energi Mega
Assuming the 90 days trading horizon Rig Tenders is expected to generate 31.66 times less return on investment than Energi Mega. But when comparing it to its historical volatility, Rig Tenders Tbk is 1.91 times less risky than Energi Mega. It trades about 0.01 of its potential returns per unit of risk. Energi Mega Persada is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 20,000 in Energi Mega Persada on September 2, 2024 and sell it today you would earn a total of 4,200 from holding Energi Mega Persada or generate 21.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rig Tenders Tbk vs. Energi Mega Persada
Performance |
| Timeline |
| Rig Tenders Tbk |
| Energi Mega Persada |
Rig Tenders and Energi Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rig Tenders and Energi Mega
The main advantage of trading using opposite Rig Tenders and Energi Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rig Tenders 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.| Rig Tenders vs. Matahari Department Store | Rig Tenders vs. Multi Medika Internasional | Rig Tenders vs. Visi Media Asia | Rig Tenders vs. Bayan Resources 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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