Correlation Between Terregra Asia and Kencana Energi
Can any of the company-specific risk be diversified away by investing in both Terregra Asia and Kencana 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 Terregra Asia and Kencana Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terregra Asia Energy and Kencana Energi Lestari, you can compare the effects of market volatilities on Terregra Asia and Kencana 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 Terregra Asia with a short position of Kencana Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terregra Asia and Kencana Energi.
Diversification Opportunities for Terregra Asia and Kencana Energi
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Terregra and Kencana is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Terregra Asia Energy and Kencana Energi Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kencana Energi Lestari and Terregra Asia 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 Terregra Asia Energy are associated (or correlated) with Kencana Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kencana Energi Lestari has no effect on the direction of Terregra Asia i.e., Terregra Asia and Kencana Energi go up and down completely randomly.
Pair Corralation between Terregra Asia and Kencana Energi
Assuming the 90 days trading horizon Terregra Asia Energy is expected to under-perform the Kencana Energi. In addition to that, Terregra Asia is 1.86 times more volatile than Kencana Energi Lestari. It trades about -0.05 of its total potential returns per unit of risk. Kencana Energi Lestari is currently generating about -0.01 per unit of volatility. If you would invest 73,691 in Kencana Energi Lestari on September 12, 2024 and sell it today you would lose (9,691) from holding Kencana Energi Lestari or give up 13.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terregra Asia Energy vs. Kencana Energi Lestari
Performance |
| Timeline |
| Terregra Asia Energy |
| Kencana Energi Lestari |
Terregra Asia and Kencana Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terregra Asia and Kencana Energi
The main advantage of trading using opposite Terregra Asia and Kencana Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terregra Asia position performs unexpectedly, Kencana 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 Kencana Energi will offset losses from the drop in Kencana Energi's long position.| Terregra Asia vs. Kapuas Prima Coal | Terregra Asia vs. Cikarang Listrindo Tbk | Terregra Asia vs. PP Presisi Tbk | Terregra Asia vs. Alfa Energi Investama |
| Kencana Energi vs. PT Indonesia Kendaraan | Kencana Energi vs. Cikarang Listrindo Tbk | Kencana Energi vs. Jasa Armada Indonesia | Kencana Energi vs. Pelita Samudera Shipping |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |