Correlation Between PT Temas and Rukun Raharja

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

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

Diversification Opportunities for PT Temas and Rukun Raharja

0.5

Correlation Coefficient

PT Temas  Rukun Raharja

Very weak diversification

The 3 months correlation between TMAS and Rukun is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PT Temas Tbk and Rukun Raharja Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rukun Raharja Tbk and PT Temas 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 PT Temas Tbk are associated (or correlated) with Rukun Raharja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rukun Raharja Tbk has no effect on the direction of PT Temas i.e., PT Temas and Rukun Raharja go up and down completely randomly.

Pair Corralation between PT Temas and Rukun Raharja

Assuming the 90 days trading horizon PT Temas Tbk is expected to generate 0.38 times more return on investment than Rukun Raharja. However, PT Temas Tbk is 2.62 times less risky than Rukun Raharja. It trades about -0.03 of its potential returns per unit of risk. Rukun Raharja Tbk is currently generating about -0.05 per unit of risk. If you would invest  14,100  in PT Temas Tbk on December 27, 2024 and sell it today you would lose (900.00) from holding PT Temas Tbk or give up 6.38% of portfolio value over 90 days.

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

PT Temas Tbk  vs.  Rukun Raharja Tbk

PT Temas Tbk

Risk-Adjusted Performance

Very Weak

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

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.

Pair Trading with PT Temas and Rukun Raharja

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

The idea behind PT Temas Tbk and Rukun Raharja 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.