Correlation Between RMK Energy and Sumber Tani
Can any of the company-specific risk be diversified away by investing in both RMK Energy and Sumber Tani 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 Sumber Tani 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 Sumber Tani Agung, you can compare the effects of market volatilities on RMK Energy and Sumber Tani 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 Sumber Tani. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMK Energy and Sumber Tani.
Diversification Opportunities for RMK Energy and Sumber Tani
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RMK and Sumber is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding RMK Energy PT and Sumber Tani Agung in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Tani Agung 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 Sumber Tani. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Tani Agung has no effect on the direction of RMK Energy i.e., RMK Energy and Sumber Tani go up and down completely randomly.
Pair Corralation between RMK Energy and Sumber Tani
Assuming the 90 days trading horizon RMK Energy PT is expected to under-perform the Sumber Tani. In addition to that, RMK Energy is 1.75 times more volatile than Sumber Tani Agung. It trades about -0.06 of its total potential returns per unit of risk. Sumber Tani Agung is currently generating about 0.0 per unit of volatility. If you would invest 86,716 in Sumber Tani Agung on September 2, 2024 and sell it today you would lose (1,716) from holding Sumber Tani Agung or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
RMK Energy PT vs. Sumber Tani Agung
Performance |
| Timeline |
| RMK Energy PT |
| Sumber Tani Agung |
RMK Energy and Sumber Tani Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMK Energy and Sumber Tani
The main advantage of trading using opposite RMK Energy and Sumber Tani positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMK Energy position performs unexpectedly, Sumber Tani 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 Sumber Tani will offset losses from the drop in Sumber Tani'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 |
| Sumber Tani vs. Triputra Agro Persada | Sumber Tani vs. Dayamitra Telekomunikasi PT | Sumber Tani vs. RMK Energy PT | Sumber Tani vs. Cisarua Mountain Dairy |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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