Correlation Between Adaro Minerals and Mitra Angkasa
Can any of the company-specific risk be diversified away by investing in both Adaro Minerals and Mitra Angkasa 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 Adaro Minerals and Mitra Angkasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adaro Minerals Indonesia and Mitra Angkasa Sejahtera, you can compare the effects of market volatilities on Adaro Minerals and Mitra Angkasa 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 Adaro Minerals with a short position of Mitra Angkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Minerals and Mitra Angkasa.
Diversification Opportunities for Adaro Minerals and Mitra Angkasa
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Adaro and Mitra is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Minerals Indonesia and Mitra Angkasa Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitra Angkasa Sejahtera and Adaro Minerals 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 Adaro Minerals Indonesia are associated (or correlated) with Mitra Angkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitra Angkasa Sejahtera has no effect on the direction of Adaro Minerals i.e., Adaro Minerals and Mitra Angkasa go up and down completely randomly.
Pair Corralation between Adaro Minerals and Mitra Angkasa
Assuming the 90 days trading horizon Adaro Minerals Indonesia is expected to under-perform the Mitra Angkasa. But the stock apears to be less risky and, when comparing its historical volatility, Adaro Minerals Indonesia is 1.72 times less risky than Mitra Angkasa. The stock trades about -0.13 of its potential returns per unit of risk. The Mitra Angkasa Sejahtera is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Mitra Angkasa Sejahtera on November 28, 2024 and sell it today you would lose (100.00) from holding Mitra Angkasa Sejahtera or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adaro Minerals Indonesia vs. Mitra Angkasa Sejahtera
Performance |
| Timeline |
| Adaro Minerals Indonesia |
| Mitra Angkasa Sejahtera |
Adaro Minerals and Mitra Angkasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Minerals and Mitra Angkasa
The main advantage of trading using opposite Adaro Minerals and Mitra Angkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Minerals position performs unexpectedly, Mitra Angkasa 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 Mitra Angkasa will offset losses from the drop in Mitra Angkasa's long position.| Adaro Minerals vs. Bank Artos Indonesia | Adaro Minerals vs. GoTo Gojek Tokopedia | Adaro Minerals vs. Elang Mahkota Teknologi | Adaro Minerals vs. PT Bukalapak |
| Mitra Angkasa vs. Autopedia Sukses Lestari | Mitra Angkasa vs. Net Visi Media | Mitra Angkasa vs. Adaro Minerals Indonesia | Mitra Angkasa vs. Indo Pureco Pratama |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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