Correlation Between RMK Energy and Trimegah Karya
Can any of the company-specific risk be diversified away by investing in both RMK Energy and Trimegah Karya 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 Trimegah Karya 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 Trimegah Karya Pratama, you can compare the effects of market volatilities on RMK Energy and Trimegah Karya 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 Trimegah Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMK Energy and Trimegah Karya.
Diversification Opportunities for RMK Energy and Trimegah Karya
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RMK and Trimegah is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding RMK Energy PT and Trimegah Karya Pratama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Karya Pratama 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 Trimegah Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Karya Pratama has no effect on the direction of RMK Energy i.e., RMK Energy and Trimegah Karya go up and down completely randomly.
Pair Corralation between RMK Energy and Trimegah Karya
Assuming the 90 days trading horizon RMK Energy PT is expected to generate 1.43 times more return on investment than Trimegah Karya. However, RMK Energy is 1.43 times more volatile than Trimegah Karya Pratama. It trades about 0.05 of its potential returns per unit of risk. Trimegah Karya Pratama is currently generating about -0.17 per unit of risk. If you would invest 50,000 in RMK Energy PT on September 1, 2024 and sell it today you would earn a total of 1,000.00 from holding RMK Energy PT or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
RMK Energy PT vs. Trimegah Karya Pratama
Performance |
| Timeline |
| RMK Energy PT |
| Trimegah Karya Pratama |
RMK Energy and Trimegah Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMK Energy and Trimegah Karya
The main advantage of trading using opposite RMK Energy and Trimegah Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMK Energy position performs unexpectedly, Trimegah Karya 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 Trimegah Karya will offset losses from the drop in Trimegah Karya's long position.| RMK Energy vs. Bank Artos Indonesia | RMK Energy vs. GoTo Gojek Tokopedia | RMK Energy vs. Elang Mahkota Teknologi | RMK Energy vs. PT Bukalapak |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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