Correlation Between Adaro Minerals and Sumber Global
Can any of the company-specific risk be diversified away by investing in both Adaro Minerals and Sumber Global 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 Sumber Global 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 Sumber Global Energy, you can compare the effects of market volatilities on Adaro Minerals and Sumber Global 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 Sumber Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Minerals and Sumber Global.
Diversification Opportunities for Adaro Minerals and Sumber Global
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Adaro and Sumber is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Minerals Indonesia and Sumber Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Global Energy 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 Sumber Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Global Energy has no effect on the direction of Adaro Minerals i.e., Adaro Minerals and Sumber Global go up and down completely randomly.
Pair Corralation between Adaro Minerals and Sumber Global
Assuming the 90 days trading horizon Adaro Minerals Indonesia is expected to under-perform the Sumber Global. But the stock apears to be less risky and, when comparing its historical volatility, Adaro Minerals Indonesia is 15.61 times less risky than Sumber Global. The stock trades about 0.0 of its potential returns per unit of risk. The Sumber Global Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17,310 in Sumber Global Energy on August 26, 2024 and sell it today you would earn a total of 23,090 from holding Sumber Global Energy or generate 133.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adaro Minerals Indonesia vs. Sumber Global Energy
Performance |
| Timeline |
| Adaro Minerals Indonesia |
| Sumber Global Energy |
Adaro Minerals and Sumber Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Minerals and Sumber Global
The main advantage of trading using opposite Adaro Minerals and Sumber Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Minerals position performs unexpectedly, Sumber Global 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 Sumber Global will offset losses from the drop in Sumber Global'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 |
| Sumber Global vs. Golden Eagle Energy | Sumber Global vs. Baramulti Suksessarana Tbk | Sumber Global vs. TBS Energi Utama | Sumber Global vs. Resource Alam Indonesia |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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