Correlation Between Radiant Utama and Exploitasi Energi
Can any of the company-specific risk be diversified away by investing in both Radiant Utama and Exploitasi Energi 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 Radiant Utama and Exploitasi Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radiant Utama Interinsco and Exploitasi Energi Indonesia, you can compare the effects of market volatilities on Radiant Utama and Exploitasi Energi 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 Radiant Utama with a short position of Exploitasi Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Utama and Exploitasi Energi.
Diversification Opportunities for Radiant Utama and Exploitasi Energi
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Radiant and Exploitasi is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Utama Interinsco and Exploitasi Energi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exploitasi Energi and Radiant Utama 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 Radiant Utama Interinsco are associated (or correlated) with Exploitasi Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exploitasi Energi has no effect on the direction of Radiant Utama i.e., Radiant Utama and Exploitasi Energi go up and down completely randomly.
Pair Corralation between Radiant Utama and Exploitasi Energi
Assuming the 90 days trading horizon Radiant Utama Interinsco is expected to generate 0.54 times more return on investment than Exploitasi Energi. However, Radiant Utama Interinsco is 1.85 times less risky than Exploitasi Energi. It trades about 0.01 of its potential returns per unit of risk. Exploitasi Energi Indonesia is currently generating about -0.03 per unit of risk. If you would invest 20,224 in Radiant Utama Interinsco on August 25, 2024 and sell it today you would lose (3,024) from holding Radiant Utama Interinsco or give up 14.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Radiant Utama Interinsco vs. Exploitasi Energi Indonesia
Performance |
| Timeline |
| Radiant Utama Interinsco |
| Exploitasi Energi |
Radiant Utama and Exploitasi Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radiant Utama and Exploitasi Energi
The main advantage of trading using opposite Radiant Utama and Exploitasi Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radiant Utama position performs unexpectedly, Exploitasi Energi 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 Exploitasi Energi will offset losses from the drop in Exploitasi Energi's long position.| Radiant Utama vs. Petrosea Tbk | Radiant Utama vs. Harum Energy Tbk | Radiant Utama vs. Perdana Karya Perkasa | Radiant Utama vs. Samindo Resources Tbk |
| Exploitasi Energi vs. Petrosea Tbk | Exploitasi Energi vs. Harum Energy Tbk | Exploitasi Energi vs. Perdana Karya Perkasa | Exploitasi Energi vs. Samindo Resources 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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