Correlation Between Semacom Integrated and RMK Energy
Can any of the company-specific risk be diversified away by investing in both Semacom Integrated and RMK 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 Semacom Integrated and RMK Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semacom Integrated Tbk and RMK Energy PT, you can compare the effects of market volatilities on Semacom Integrated and RMK 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 Semacom Integrated with a short position of RMK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semacom Integrated and RMK Energy.
Diversification Opportunities for Semacom Integrated and RMK Energy
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Semacom and RMK is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Semacom Integrated Tbk and RMK Energy PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMK Energy PT and Semacom Integrated 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 Semacom Integrated Tbk are associated (or correlated) with RMK Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMK Energy PT has no effect on the direction of Semacom Integrated i.e., Semacom Integrated and RMK Energy go up and down completely randomly.
Pair Corralation between Semacom Integrated and RMK Energy
Assuming the 90 days trading horizon Semacom Integrated Tbk is expected to under-perform the RMK Energy. In addition to that, Semacom Integrated is 1.85 times more volatile than RMK Energy PT. It trades about -0.03 of its total potential returns per unit of risk. RMK Energy PT is currently generating about 0.11 per unit of volatility. If you would invest 52,000 in RMK Energy PT on November 28, 2024 and sell it today you would earn a total of 1,500 from holding RMK Energy PT or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semacom Integrated Tbk vs. RMK Energy PT
Performance |
| Timeline |
| Semacom Integrated Tbk |
| RMK Energy PT |
Semacom Integrated and RMK Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semacom Integrated and RMK Energy
The main advantage of trading using opposite Semacom Integrated and RMK Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semacom Integrated position performs unexpectedly, RMK 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 RMK Energy will offset losses from the drop in RMK Energy's long position.| Semacom Integrated vs. RMK Energy PT | Semacom Integrated vs. Adaro Minerals Indonesia | Semacom Integrated vs. Sumber Global Energy | Semacom Integrated vs. PT Hasnur Internasional |
| RMK Energy vs. Adaro Minerals Indonesia | RMK Energy vs. Prima Andalan Mandiri | RMK Energy vs. Sumber Global Energy | RMK Energy vs. Golden Eagle Energy |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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