Correlation Between Exploitasi Energi and Perdana Karya

Can any of the company-specific risk be diversified away by investing in both Exploitasi Energi and Perdana Karya 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 Perdana Karya 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 Perdana Karya Perkasa, you can compare the effects of market volatilities on Exploitasi Energi and Perdana Karya 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 Perdana Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exploitasi Energi and Perdana Karya.

Diversification Opportunities for Exploitasi Energi and Perdana Karya

-0.83

Correlation Coefficient

Exploitasi Energi  Perdana Karya

Pay attention - limited upside

The 3 months correlation between Exploitasi and Perdana is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Exploitasi Energi Indonesia and Perdana Karya Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdana Karya Perkasa 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 Perdana Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdana Karya Perkasa has no effect on the direction of Exploitasi Energi i.e., Exploitasi Energi and Perdana Karya go up and down completely randomly.

Pair Corralation between Exploitasi Energi and Perdana Karya

Assuming the 90 days trading horizon Exploitasi Energi Indonesia is expected to generate 4.32 times more return on investment than Perdana Karya. However, Exploitasi Energi is 4.32 times more volatile than Perdana Karya Perkasa. It trades about 0.43 of its potential returns per unit of risk. Perdana Karya Perkasa is currently generating about -0.12 per unit of risk. If you would invest  600.00  in Exploitasi Energi Indonesia on December 2, 2024 and sell it today you would earn a total of  2,900  from holding Exploitasi Energi Indonesia or generate 483.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Exploitasi Energi Indonesia  vs.  Perdana Karya Perkasa

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 34 (%) 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.

Perdana Karya Perkasa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perdana Karya Perkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Exploitasi Energi and Perdana Karya

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

The idea behind Exploitasi Energi Indonesia and Perdana Karya Perkasa 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.