Correlation Between Exploitasi Energi and Central Proteina

Can any of the company-specific risk be diversified away by investing in both Exploitasi Energi and Central Proteina 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 Exploitasi Energi and Central Proteina into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exploitasi Energi Indonesia and Central Proteina Prima, you can compare the effects of market volatilities on Exploitasi Energi and Central Proteina 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 Exploitasi Energi with a short position of Central Proteina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exploitasi Energi and Central Proteina.

Diversification Opportunities for Exploitasi Energi and Central Proteina

0.13

Correlation Coefficient

Exploitasi Energi  Central Proteina

Average diversification

The 3 months correlation between Exploitasi and Central is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Exploitasi Energi Indonesia and Central Proteina Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Proteina Prima and Exploitasi Energi 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 Exploitasi Energi Indonesia are associated (or correlated) with Central Proteina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Proteina Prima has no effect on the direction of Exploitasi Energi i.e., Exploitasi Energi and Central Proteina go up and down completely randomly.

Pair Corralation between Exploitasi Energi and Central Proteina

Assuming the 90 days trading horizon Exploitasi Energi Indonesia is expected to under-perform the Central Proteina. In addition to that, Exploitasi Energi is 7.17 times more volatile than Central Proteina Prima. It trades about 0.0 of its total potential returns per unit of risk. Central Proteina Prima is currently generating about 0.01 per unit of volatility. If you would invest  5,000  in Central Proteina Prima on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Central Proteina Prima or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Exploitasi Energi Indonesia  vs.  Central Proteina Prima

Exploitasi Energi

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Exploitasi Energi Indonesia are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Exploitasi Energi disclosed solid returns over the last few months and may actually be approaching a breakup point.

Central Proteina Prima

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Central Proteina Prima are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Central Proteina is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Exploitasi Energi and Central Proteina

The main advantage of trading using opposite Exploitasi Energi and Central Proteina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exploitasi Energi position performs unexpectedly, Central Proteina 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 Central Proteina will offset losses from the drop in Central Proteina's long position.

The idea behind Exploitasi Energi Indonesia and Central Proteina Prima pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.