Correlation Between Rig Tenders and TBS Energi
Can any of the company-specific risk be diversified away by investing in both Rig Tenders and TBS 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 Rig Tenders and TBS Energi 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 TBS Energi Utama, you can compare the effects of market volatilities on Rig Tenders and TBS 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 Rig Tenders with a short position of TBS Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rig Tenders and TBS Energi.
Diversification Opportunities for Rig Tenders and TBS Energi
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rig and TBS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Rig Tenders Tbk and TBS Energi Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBS Energi Utama 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 TBS Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBS Energi Utama has no effect on the direction of Rig Tenders i.e., Rig Tenders and TBS Energi go up and down completely randomly.
Pair Corralation between Rig Tenders and TBS Energi
Assuming the 90 days trading horizon Rig Tenders Tbk is expected to generate 0.76 times more return on investment than TBS Energi. However, Rig Tenders Tbk is 1.32 times less risky than TBS Energi. It trades about 0.03 of its potential returns per unit of risk. TBS Energi Utama is currently generating about 0.0 per unit of risk. If you would invest 51,500 in Rig Tenders Tbk on September 3, 2024 and sell it today you would earn a total of 14,000 from holding Rig Tenders Tbk or generate 27.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Rig Tenders Tbk vs. TBS Energi Utama
Performance |
| Timeline |
| Rig Tenders Tbk |
| TBS Energi Utama |
Rig Tenders and TBS Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rig Tenders and TBS Energi
The main advantage of trading using opposite Rig Tenders and TBS Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rig Tenders position performs unexpectedly, TBS 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 TBS Energi will offset losses from the drop in TBS Energi's long position.| Rig Tenders vs. Intanwijaya Internasional Tbk | Rig Tenders vs. Champion Pacific Indonesia | Rig Tenders vs. Mitra Pinasthika Mustika | Rig Tenders vs. Jakarta Int Hotels |
| TBS Energi vs. Weha Transportasi Indonesia | TBS Energi vs. Mitra Pinasthika Mustika | TBS Energi vs. Jakarta Int Hotels | TBS Energi vs. Asuransi Harta Aman |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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