Correlation Between Adaro Minerals and Elang Mahkota
Can any of the company-specific risk be diversified away by investing in both Adaro Minerals and Elang Mahkota 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 Elang Mahkota 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 Elang Mahkota Teknologi, you can compare the effects of market volatilities on Adaro Minerals and Elang Mahkota 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 Elang Mahkota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Minerals and Elang Mahkota.
Diversification Opportunities for Adaro Minerals and Elang Mahkota
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adaro and Elang is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Minerals Indonesia and Elang Mahkota Teknologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elang Mahkota Teknologi 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 Elang Mahkota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elang Mahkota Teknologi has no effect on the direction of Adaro Minerals i.e., Adaro Minerals and Elang Mahkota go up and down completely randomly.
Pair Corralation between Adaro Minerals and Elang Mahkota
Assuming the 90 days trading horizon Adaro Minerals Indonesia is expected to under-perform the Elang Mahkota. But the stock apears to be less risky and, when comparing its historical volatility, Adaro Minerals Indonesia is 1.83 times less risky than Elang Mahkota. The stock trades about -0.16 of its potential returns per unit of risk. The Elang Mahkota Teknologi is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 54,500 in Elang Mahkota Teknologi on October 22, 2024 and sell it today you would lose (500.00) from holding Elang Mahkota Teknologi or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adaro Minerals Indonesia vs. Elang Mahkota Teknologi
Performance |
| Timeline |
| Adaro Minerals Indonesia |
| Elang Mahkota Teknologi |
Adaro Minerals and Elang Mahkota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Minerals and Elang Mahkota
The main advantage of trading using opposite Adaro Minerals and Elang Mahkota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Minerals position performs unexpectedly, Elang Mahkota 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 Elang Mahkota will offset losses from the drop in Elang Mahkota'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 |
| Elang Mahkota vs. Bank Artos Indonesia | Elang Mahkota vs. PT Bukalapak | Elang Mahkota vs. Sumber Alfaria Trijaya | Elang Mahkota vs. Merdeka Copper Gold |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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