Correlation Between Sumber Energi and Dwi Guna

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

By analyzing existing cross correlation between Sumber Energi Andalan and Dwi Guna Laksana, you can compare the effects of market volatilities on Sumber Energi and Dwi Guna 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 Sumber Energi with a short position of Dwi Guna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Energi and Dwi Guna.

Diversification Opportunities for Sumber Energi and Dwi Guna

-0.51

Correlation Coefficient

Sumber Energi  Dwi Guna

Excellent diversification

The 3 months correlation between Sumber and Dwi is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Energi Andalan and Dwi Guna Laksana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dwi Guna Laksana and Sumber 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 Sumber Energi Andalan are associated (or correlated) with Dwi Guna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dwi Guna Laksana has no effect on the direction of Sumber Energi i.e., Sumber Energi and Dwi Guna go up and down completely randomly.

Pair Corralation between Sumber Energi and Dwi Guna

Assuming the 90 days trading horizon Sumber Energi Andalan is expected to generate 0.86 times more return on investment than Dwi Guna. However, Sumber Energi Andalan is 1.17 times less risky than Dwi Guna. It trades about 0.28 of its potential returns per unit of risk. Dwi Guna Laksana is currently generating about -0.36 per unit of risk. If you would invest  70,000  in Sumber Energi Andalan on October 20, 2024 and sell it today you would earn a total of  21,000  from holding Sumber Energi Andalan or generate 30.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Sumber Energi Andalan  vs.  Dwi Guna Laksana

Sumber Energi Andalan

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sumber Energi Andalan are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sumber Energi disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dwi Guna Laksana

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dwi Guna Laksana are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Dwi Guna disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sumber Energi and Dwi Guna

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

The idea behind Sumber Energi Andalan and Dwi Guna Laksana 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.