Correlation Between RMK Energy and Obm Drilchem
Can any of the company-specific risk be diversified away by investing in both RMK Energy and Obm Drilchem 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 Obm Drilchem 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 Obm Drilchem PT, you can compare the effects of market volatilities on RMK Energy and Obm Drilchem 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 Obm Drilchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMK Energy and Obm Drilchem.
Diversification Opportunities for RMK Energy and Obm Drilchem
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RMK and Obm is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding RMK Energy PT and Obm Drilchem PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obm Drilchem PT 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 Obm Drilchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obm Drilchem PT has no effect on the direction of RMK Energy i.e., RMK Energy and Obm Drilchem go up and down completely randomly.
Pair Corralation between RMK Energy and Obm Drilchem
Assuming the 90 days trading horizon RMK Energy PT is expected to under-perform the Obm Drilchem. But the stock apears to be less risky and, when comparing its historical volatility, RMK Energy PT is 1.16 times less risky than Obm Drilchem. The stock trades about -0.05 of its potential returns per unit of risk. The Obm Drilchem PT is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 17,700 in Obm Drilchem PT on August 31, 2024 and sell it today you would earn a total of 3,700 from holding Obm Drilchem PT or generate 20.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
RMK Energy PT vs. Obm Drilchem PT
Performance |
| Timeline |
| RMK Energy PT |
| Obm Drilchem PT |
RMK Energy and Obm Drilchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMK Energy and Obm Drilchem
The main advantage of trading using opposite RMK Energy and Obm Drilchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMK Energy position performs unexpectedly, Obm Drilchem 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 Obm Drilchem will offset losses from the drop in Obm Drilchem'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 |
| Obm Drilchem vs. RMK Energy PT | Obm Drilchem vs. PT Hasnur Internasional | Obm Drilchem vs. Surya Biru Murni | Obm Drilchem vs. PAM Mineral 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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