Correlation Between Rig Tenders and Steady Safe

Can any of the company-specific risk be diversified away by investing in both Rig Tenders and Steady Safe 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 Rig Tenders and Steady Safe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rig Tenders Tbk and Steady Safe TBK, you can compare the effects of market volatilities on Rig Tenders and Steady Safe 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 Rig Tenders with a short position of Steady Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rig Tenders and Steady Safe.

Diversification Opportunities for Rig Tenders and Steady Safe

-0.51

Correlation Coefficient

Rig Tenders  Steady Safe

Excellent diversification

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

Pair Corralation between Rig Tenders and Steady Safe

Assuming the 90 days trading horizon Rig Tenders Tbk is expected to generate 0.64 times more return on investment than Steady Safe. However, Rig Tenders Tbk is 1.57 times less risky than Steady Safe. It trades about 0.1 of its potential returns per unit of risk. Steady Safe TBK is currently generating about 0.06 per unit of risk. If you would invest  60,000  in Rig Tenders Tbk on November 29, 2024 and sell it today you would earn a total of  17,500  from holding Rig Tenders Tbk or generate 29.17% return on investment over 90 days.

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

Rig Tenders Tbk  vs.  Steady Safe TBK

Rig Tenders Tbk

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rig Tenders Tbk are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Rig Tenders disclosed solid returns over the last few months and may actually be approaching a breakup point.

Steady Safe TBK

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Rig Tenders and Steady Safe

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

The idea behind Rig Tenders Tbk and Steady Safe TBK 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.