Correlation Between Radiant Utama and Harum Energy
Can any of the company-specific risk be diversified away by investing in both Radiant Utama and Harum Energy 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 Harum Energy 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 Harum Energy Tbk, you can compare the effects of market volatilities on Radiant Utama and Harum Energy 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 Harum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Utama and Harum Energy.
Diversification Opportunities for Radiant Utama and Harum Energy
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Radiant and Harum is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Utama Interinsco and Harum Energy Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harum Energy Tbk 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 Harum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harum Energy Tbk has no effect on the direction of Radiant Utama i.e., Radiant Utama and Harum Energy go up and down completely randomly.
Pair Corralation between Radiant Utama and Harum Energy
Assuming the 90 days trading horizon Radiant Utama Interinsco is expected to generate 1.37 times more return on investment than Harum Energy. However, Radiant Utama is 1.37 times more volatile than Harum Energy Tbk. It trades about 0.01 of its potential returns per unit of risk. Harum Energy Tbk is currently generating about -0.02 per unit of risk. If you would invest 19,537 in Radiant Utama Interinsco on September 3, 2024 and sell it today you would lose (2,337) from holding Radiant Utama Interinsco or give up 11.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Radiant Utama Interinsco vs. Harum Energy Tbk
Performance |
| Timeline |
| Radiant Utama Interinsco |
| Harum Energy Tbk |
Radiant Utama and Harum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radiant Utama and Harum Energy
The main advantage of trading using opposite Radiant Utama and Harum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radiant Utama position performs unexpectedly, Harum Energy 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 Harum Energy will offset losses from the drop in Harum Energy's long position.| Radiant Utama vs. Perdana Karya Perkasa | Radiant Utama vs. Multi Indocitra Tbk | Radiant Utama vs. Rukun Raharja Tbk | Radiant Utama vs. Ricky Putra Globalindo |
| Harum Energy vs. Weha Transportasi Indonesia | Harum Energy vs. Mitra Pinasthika Mustika | Harum Energy vs. Jakarta Int Hotels | Harum Energy vs. Asuransi Harta Aman |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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