Correlation Between RMK Energy and Widodo Makmur

Can any of the company-specific risk be diversified away by investing in both RMK Energy and Widodo Makmur 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 RMK Energy and Widodo Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RMK Energy PT and Widodo Makmur Perkasa, you can compare the effects of market volatilities on RMK Energy and Widodo Makmur 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 RMK Energy with a short position of Widodo Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMK Energy and Widodo Makmur.

Diversification Opportunities for RMK Energy and Widodo Makmur

0.0

Correlation Coefficient

RMK Energy  Widodo Makmur

Pay attention - limited upside

The 3 months correlation between RMK and Widodo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RMK Energy PT and Widodo Makmur Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Widodo Makmur Perkasa and RMK Energy 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 RMK Energy PT are associated (or correlated) with Widodo Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Widodo Makmur Perkasa has no effect on the direction of RMK Energy i.e., RMK Energy and Widodo Makmur go up and down completely randomly.

Pair Corralation between RMK Energy and Widodo Makmur

If you would invest  1,200  in Widodo Makmur Perkasa on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Widodo Makmur Perkasa or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

RMK Energy PT  vs.  Widodo Makmur Perkasa

RMK Energy PT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RMK Energy PT 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Widodo Makmur Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Widodo Makmur Perkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Widodo Makmur 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 RMK Energy and Widodo Makmur

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

The idea behind RMK Energy PT and Widodo Makmur Perkasa 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.