Correlation Between RMK Energy and Baramulti Suksessarana
Can any of the company-specific risk be diversified away by investing in both RMK Energy and Baramulti Suksessarana 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 RMK Energy and Baramulti Suksessarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RMK Energy PT and Baramulti Suksessarana Tbk, you can compare the effects of market volatilities on RMK Energy and Baramulti Suksessarana 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 RMK Energy with a short position of Baramulti Suksessarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMK Energy and Baramulti Suksessarana.
Diversification Opportunities for RMK Energy and Baramulti Suksessarana
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RMK and Baramulti is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding RMK Energy PT and Baramulti Suksessarana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baramulti Suksessarana and RMK Energy 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 RMK Energy PT are associated (or correlated) with Baramulti Suksessarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baramulti Suksessarana has no effect on the direction of RMK Energy i.e., RMK Energy and Baramulti Suksessarana go up and down completely randomly.
Pair Corralation between RMK Energy and Baramulti Suksessarana
Assuming the 90 days trading horizon RMK Energy PT is expected to under-perform the Baramulti Suksessarana. In addition to that, RMK Energy is 1.66 times more volatile than Baramulti Suksessarana Tbk. It trades about -0.06 of its total potential returns per unit of risk. Baramulti Suksessarana Tbk is currently generating about 0.02 per unit of volatility. If you would invest 427,891 in Baramulti Suksessarana Tbk on August 26, 2024 and sell it today you would earn a total of 1,109 from holding Baramulti Suksessarana Tbk or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RMK Energy PT vs. Baramulti Suksessarana Tbk
Performance |
| Timeline |
| RMK Energy PT |
| Baramulti Suksessarana |
RMK Energy and Baramulti Suksessarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMK Energy and Baramulti Suksessarana
The main advantage of trading using opposite RMK Energy and Baramulti Suksessarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMK Energy position performs unexpectedly, Baramulti Suksessarana 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 Baramulti Suksessarana will offset losses from the drop in Baramulti Suksessarana's long position.| RMK Energy vs. Adaro Minerals Indonesia | RMK Energy vs. Prima Andalan Mandiri | RMK Energy vs. Sumber Global Energy | RMK Energy vs. Golden Eagle Energy |
| Baramulti Suksessarana vs. Mitrabara Adiperdana PT | Baramulti Suksessarana vs. Bayan Resources Tbk | Baramulti Suksessarana vs. Abm Investama Tbk | Baramulti Suksessarana vs. TBS Energi Utama |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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