Correlation Between Rukun Raharja and TBS Energi

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

Diversification Opportunities for Rukun Raharja and TBS Energi

-0.17

Correlation Coefficient

Rukun Raharja  TBS Energi

Good diversification

The 3 months correlation between Rukun and TBS is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Rukun Raharja Tbk and TBS Energi Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBS Energi Utama 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 TBS Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBS Energi Utama has no effect on the direction of Rukun Raharja i.e., Rukun Raharja and TBS Energi go up and down completely randomly.

Pair Corralation between Rukun Raharja and TBS Energi

Assuming the 90 days trading horizon Rukun Raharja Tbk is expected to generate 1.13 times more return on investment than TBS Energi. However, Rukun Raharja is 1.13 times more volatile than TBS Energi Utama. It trades about 0.06 of its potential returns per unit of risk. TBS Energi Utama is currently generating about 0.0 per unit of risk. If you would invest  90,663  in Rukun Raharja Tbk on September 1, 2024 and sell it today you would earn a total of  122,337  from holding Rukun Raharja Tbk or generate 134.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Rukun Raharja Tbk  vs.  TBS Energi Utama

Rukun Raharja Tbk

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rukun Raharja Tbk are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Rukun Raharja disclosed solid returns over the last few months and may actually be approaching a breakup point.

TBS Energi Utama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TBS Energi Utama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, TBS Energi 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 Rukun Raharja and TBS Energi

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

The idea behind Rukun Raharja Tbk and TBS Energi Utama 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.