Correlation Between Terregra Asia and Emdeki Utama

Can any of the company-specific risk be diversified away by investing in both Terregra Asia and Emdeki Utama 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 Terregra Asia and Emdeki Utama into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Terregra Asia Energy and Emdeki Utama Tbk, you can compare the effects of market volatilities on Terregra Asia and Emdeki Utama 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 Terregra Asia with a short position of Emdeki Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terregra Asia and Emdeki Utama.

Diversification Opportunities for Terregra Asia and Emdeki Utama

-0.72

Correlation Coefficient

Terregra Asia  Emdeki Utama

Pay attention - limited upside

The 3 months correlation between Terregra and Emdeki is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Terregra Asia Energy and Emdeki Utama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emdeki Utama Tbk and Terregra Asia 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 Terregra Asia Energy are associated (or correlated) with Emdeki Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emdeki Utama Tbk has no effect on the direction of Terregra Asia i.e., Terregra Asia and Emdeki Utama go up and down completely randomly.

Pair Corralation between Terregra Asia and Emdeki Utama

Assuming the 90 days trading horizon Terregra Asia Energy is expected to generate 6.6 times more return on investment than Emdeki Utama. However, Terregra Asia is 6.6 times more volatile than Emdeki Utama Tbk. It trades about 0.28 of its potential returns per unit of risk. Emdeki Utama Tbk is currently generating about -0.15 per unit of risk. If you would invest  2,100  in Terregra Asia Energy on October 26, 2024 and sell it today you would earn a total of  2,800  from holding Terregra Asia Energy or generate 133.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Terregra Asia Energy  vs.  Emdeki Utama Tbk

Terregra Asia Energy

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Terregra Asia Energy are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Terregra Asia disclosed solid returns over the last few months and may actually be approaching a breakup point.

Emdeki Utama Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emdeki Utama Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Terregra Asia and Emdeki Utama

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

The idea behind Terregra Asia Energy and Emdeki Utama 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..