Correlation Between RMK Energy and Mitrabara Adiperdana
Can any of the company-specific risk be diversified away by investing in both RMK Energy and Mitrabara Adiperdana 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 Mitrabara Adiperdana 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 Mitrabara Adiperdana PT, you can compare the effects of market volatilities on RMK Energy and Mitrabara Adiperdana 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 Mitrabara Adiperdana. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMK Energy and Mitrabara Adiperdana.
Diversification Opportunities for RMK Energy and Mitrabara Adiperdana
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RMK and Mitrabara is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding RMK Energy PT and Mitrabara Adiperdana PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitrabara Adiperdana 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 Mitrabara Adiperdana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitrabara Adiperdana has no effect on the direction of RMK Energy i.e., RMK Energy and Mitrabara Adiperdana go up and down completely randomly.
Pair Corralation between RMK Energy and Mitrabara Adiperdana
Assuming the 90 days trading horizon RMK Energy PT is expected to generate 2.47 times more return on investment than Mitrabara Adiperdana. However, RMK Energy is 2.47 times more volatile than Mitrabara Adiperdana PT. It trades about -0.06 of its potential returns per unit of risk. Mitrabara Adiperdana PT is currently generating about -0.42 per unit of risk. If you would invest 53,500 in RMK Energy PT on August 26, 2024 and sell it today you would lose (2,500) from holding RMK Energy PT or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RMK Energy PT vs. Mitrabara Adiperdana PT
Performance |
| Timeline |
| RMK Energy PT |
| Mitrabara Adiperdana |
RMK Energy and Mitrabara Adiperdana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMK Energy and Mitrabara Adiperdana
The main advantage of trading using opposite RMK Energy and Mitrabara Adiperdana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMK Energy position performs unexpectedly, Mitrabara Adiperdana 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 Mitrabara Adiperdana will offset losses from the drop in Mitrabara Adiperdana'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 |
| Mitrabara Adiperdana vs. Baramulti Suksessarana Tbk | Mitrabara Adiperdana vs. Samindo Resources Tbk | Mitrabara Adiperdana vs. Hexindo Adiperkasa Tbk | Mitrabara Adiperdana vs. Mitra Pinasthika Mustika |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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