Correlation Between Adaro Minerals and Putra Mandiri
Can any of the company-specific risk be diversified away by investing in both Adaro Minerals and Putra Mandiri 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 Putra Mandiri 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 Putra Mandiri Jembar, you can compare the effects of market volatilities on Adaro Minerals and Putra Mandiri 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 Putra Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Minerals and Putra Mandiri.
Diversification Opportunities for Adaro Minerals and Putra Mandiri
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adaro and Putra is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Minerals Indonesia and Putra Mandiri Jembar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Mandiri Jembar 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 Putra Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Mandiri Jembar has no effect on the direction of Adaro Minerals i.e., Adaro Minerals and Putra Mandiri go up and down completely randomly.
Pair Corralation between Adaro Minerals and Putra Mandiri
Assuming the 90 days trading horizon Adaro Minerals Indonesia is expected to under-perform the Putra Mandiri. But the stock apears to be less risky and, when comparing its historical volatility, Adaro Minerals Indonesia is 1.46 times less risky than Putra Mandiri. The stock trades about -0.04 of its potential returns per unit of risk. The Putra Mandiri Jembar is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 12,900 in Putra Mandiri Jembar on August 31, 2024 and sell it today you would lose (900.00) from holding Putra Mandiri Jembar or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adaro Minerals Indonesia vs. Putra Mandiri Jembar
Performance |
| Timeline |
| Adaro Minerals Indonesia |
| Putra Mandiri Jembar |
Adaro Minerals and Putra Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Minerals and Putra Mandiri
The main advantage of trading using opposite Adaro Minerals and Putra Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Minerals position performs unexpectedly, Putra Mandiri 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 Putra Mandiri will offset losses from the drop in Putra Mandiri'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 |
| Putra Mandiri vs. Adaro Minerals Indonesia | Putra Mandiri vs. Dharma Polimetal Tbk | Putra Mandiri vs. Wir Asia Tbk | Putra Mandiri vs. Adi Sarana Armada |
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 Stocks Directory module to find actively traded stocks across global markets.
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