Correlation Between Adaro Minerals and Hartadinata Abadi
Can any of the company-specific risk be diversified away by investing in both Adaro Minerals and Hartadinata Abadi 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 Hartadinata Abadi 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 Hartadinata Abadi Tbk, you can compare the effects of market volatilities on Adaro Minerals and Hartadinata Abadi 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 Hartadinata Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Minerals and Hartadinata Abadi.
Diversification Opportunities for Adaro Minerals and Hartadinata Abadi
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adaro and Hartadinata is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Minerals Indonesia and Hartadinata Abadi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartadinata Abadi Tbk 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 Hartadinata Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartadinata Abadi Tbk has no effect on the direction of Adaro Minerals i.e., Adaro Minerals and Hartadinata Abadi go up and down completely randomly.
Pair Corralation between Adaro Minerals and Hartadinata Abadi
Assuming the 90 days trading horizon Adaro Minerals Indonesia is expected to generate 1.07 times more return on investment than Hartadinata Abadi. However, Adaro Minerals is 1.07 times more volatile than Hartadinata Abadi Tbk. It trades about 0.05 of its potential returns per unit of risk. Hartadinata Abadi Tbk is currently generating about 0.03 per unit of risk. If you would invest 84,000 in Adaro Minerals Indonesia on August 31, 2024 and sell it today you would earn a total of 39,000 from holding Adaro Minerals Indonesia or generate 46.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Adaro Minerals Indonesia vs. Hartadinata Abadi Tbk
Performance |
| Timeline |
| Adaro Minerals Indonesia |
| Hartadinata Abadi Tbk |
Adaro Minerals and Hartadinata Abadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Minerals and Hartadinata Abadi
The main advantage of trading using opposite Adaro Minerals and Hartadinata Abadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Minerals position performs unexpectedly, Hartadinata Abadi 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 Hartadinata Abadi will offset losses from the drop in Hartadinata Abadi'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 |
| Hartadinata Abadi vs. Steel Pipe Industry | Hartadinata Abadi vs. Puradelta Lestari PT | Hartadinata Abadi vs. Jasa Armada Indonesia | Hartadinata Abadi vs. Integra Indocabinet Tbk |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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