Correlation Between Wahana Inti and RMK Energy
Can any of the company-specific risk be diversified away by investing in both Wahana Inti and RMK Energy 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 Wahana Inti and RMK Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wahana Inti MakmurTbk and RMK Energy PT, you can compare the effects of market volatilities on Wahana Inti and RMK Energy 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 Wahana Inti with a short position of RMK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahana Inti and RMK Energy.
Diversification Opportunities for Wahana Inti and RMK Energy
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wahana and RMK is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wahana Inti MakmurTbk and RMK Energy PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMK Energy PT and Wahana Inti 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 Wahana Inti MakmurTbk are associated (or correlated) with RMK Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMK Energy PT has no effect on the direction of Wahana Inti i.e., Wahana Inti and RMK Energy go up and down completely randomly.
Pair Corralation between Wahana Inti and RMK Energy
Assuming the 90 days trading horizon Wahana Inti MakmurTbk is expected to generate 2.06 times more return on investment than RMK Energy. However, Wahana Inti is 2.06 times more volatile than RMK Energy PT. It trades about 0.04 of its potential returns per unit of risk. RMK Energy PT is currently generating about -0.07 per unit of risk. If you would invest 8,000 in Wahana Inti MakmurTbk on September 18, 2024 and sell it today you would earn a total of 100.00 from holding Wahana Inti MakmurTbk or generate 1.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wahana Inti MakmurTbk vs. RMK Energy PT
Performance |
Timeline |
Wahana Inti MakmurTbk |
RMK Energy PT |
Wahana Inti and RMK Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wahana Inti and RMK Energy
The main advantage of trading using opposite Wahana Inti and RMK Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wahana Inti position performs unexpectedly, RMK Energy 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 RMK Energy will offset losses from the drop in RMK Energy's long position.Wahana Inti vs. Mahkota Group Tbk | Wahana Inti vs. Palma Serasih PT | Wahana Inti vs. Cisadane Sawit Raya | Wahana Inti vs. Diamond Food Indonesia |
RMK Energy vs. Bank Artos Indonesia | RMK Energy vs. GoTo Gojek Tokopedia | RMK Energy vs. Elang Mahkota Teknologi | RMK Energy vs. PT Bukalapak |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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