Correlation Between Rukun Raharja and Energi Mega

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

By analyzing existing cross correlation between Rukun Raharja Tbk and Energi Mega Persada, you can compare the effects of market volatilities on Rukun Raharja 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 Rukun Raharja with a short position of Energi Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rukun Raharja and Energi Mega.

Diversification Opportunities for Rukun Raharja and Energi Mega

0.53

Correlation Coefficient

Rukun Raharja  Energi Mega

Very weak diversification

The 3 months correlation between Rukun and Energi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Rukun Raharja Tbk 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 Rukun Raharja 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 Rukun Raharja Tbk 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 Rukun Raharja i.e., Rukun Raharja and Energi Mega go up and down completely randomly.

Pair Corralation between Rukun Raharja and Energi Mega

Assuming the 90 days trading horizon Rukun Raharja Tbk is expected to generate 2.46 times more return on investment than Energi Mega. However, Rukun Raharja is 2.46 times more volatile than Energi Mega Persada. It trades about -0.06 of its potential returns per unit of risk. Energi Mega Persada is currently generating about -0.18 per unit of risk. If you would invest  272,000  in Rukun Raharja Tbk on December 30, 2024 and sell it today you would lose (75,000) from holding Rukun Raharja Tbk or give up 27.57% of portfolio value over 90 days.

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

Rukun Raharja Tbk  vs.  Energi Mega Persada

Rukun Raharja Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rukun Raharja Tbk 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Energi Mega Persada

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energi Mega Persada 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Rukun Raharja and Energi Mega

The main advantage of trading using opposite Rukun Raharja and Energi Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rukun Raharja 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.

The idea behind Rukun Raharja Tbk and Energi Mega Persada 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.