Correlation Between Pertamina Geothermal and Envy Technologies

Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal and Envy Technologies 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 Pertamina Geothermal and Envy Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pertamina Geothermal Energy and Envy Technologies Indonesia, you can compare the effects of market volatilities on Pertamina Geothermal and Envy Technologies 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 Pertamina Geothermal with a short position of Envy Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and Envy Technologies.

Diversification Opportunities for Pertamina Geothermal and Envy Technologies

0.0

Correlation Coefficient

Pertamina Geothermal  Envy Technologies

Pay attention - limited upside

The 3 months correlation between Pertamina and Envy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy and Envy Technologies Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envy Technologies and Pertamina Geothermal 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 Pertamina Geothermal Energy are associated (or correlated) with Envy Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Envy Technologies has no effect on the direction of Pertamina Geothermal i.e., Pertamina Geothermal and Envy Technologies go up and down completely randomly.

Pair Corralation between Pertamina Geothermal and Envy Technologies

If you would invest  5,000  in Envy Technologies Indonesia on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Envy Technologies Indonesia or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pertamina Geothermal Energy  vs.  Envy Technologies Indonesia

Pertamina Geothermal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Envy Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Envy Technologies Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Envy Technologies is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pertamina Geothermal and Envy Technologies

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

The idea behind Pertamina Geothermal Energy and Envy Technologies Indonesia 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.