Correlation Between PT Sarana and Energi Mega
Can any of the company-specific risk be diversified away by investing in both PT Sarana and Energi Mega 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 PT Sarana and Energi Mega into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Sarana Menara and Energi Mega Persada, you can compare the effects of market volatilities on PT Sarana and Energi Mega 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 PT Sarana with a short position of Energi Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Sarana and Energi Mega.
Diversification Opportunities for PT Sarana and Energi Mega
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TOWR and Energi is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PT Sarana Menara and Energi Mega Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energi Mega Persada and PT Sarana 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 PT Sarana Menara are associated (or correlated) with Energi Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energi Mega Persada has no effect on the direction of PT Sarana i.e., PT Sarana and Energi Mega go up and down completely randomly.
Pair Corralation between PT Sarana and Energi Mega
Assuming the 90 days trading horizon PT Sarana Menara is expected to under-perform the Energi Mega. But the stock apears to be less risky and, when comparing its historical volatility, PT Sarana Menara is 3.64 times less risky than Energi Mega. The stock trades about -0.55 of its potential returns per unit of risk. The Energi Mega Persada is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 27,200 in Energi Mega Persada on September 5, 2024 and sell it today you would lose (3,800) from holding Energi Mega Persada or give up 13.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Sarana Menara vs. Energi Mega Persada
Performance |
| Timeline |
| PT Sarana Menara |
| Energi Mega Persada |
PT Sarana and Energi Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Sarana and Energi Mega
The main advantage of trading using opposite PT Sarana and Energi Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Sarana position performs unexpectedly, Energi Mega 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 Energi Mega will offset losses from the drop in Energi Mega's long position.| PT Sarana vs. Tower Bersama Infrastructure | PT Sarana vs. Merdeka Copper Gold | PT Sarana vs. XL Axiata Tbk | PT Sarana vs. Japfa Comfeed Indonesia |
| Energi Mega vs. Weha Transportasi Indonesia | Energi Mega vs. Mitra Pinasthika Mustika | Energi Mega vs. Jakarta Int Hotels | Energi Mega 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 CEOs Directory module to screen CEOs from public companies around the world.
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