Correlation Between Adaro Energy and OppFi
Can any of the company-specific risk be diversified away by investing in both Adaro Energy and OppFi 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 Energy and OppFi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adaro Energy Tbk and OppFi Inc, you can compare the effects of market volatilities on Adaro Energy and OppFi 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 Energy with a short position of OppFi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Energy and OppFi.
Diversification Opportunities for Adaro Energy and OppFi
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adaro and OppFi is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Energy Tbk and OppFi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OppFi Inc and Adaro Energy 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 Energy Tbk are associated (or correlated) with OppFi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OppFi Inc has no effect on the direction of Adaro Energy i.e., Adaro Energy and OppFi go up and down completely randomly.
Pair Corralation between Adaro Energy and OppFi
Assuming the 90 days horizon Adaro Energy is expected to generate 1.08 times less return on investment than OppFi. In addition to that, Adaro Energy is 1.87 times more volatile than OppFi Inc. It trades about 0.04 of its total potential returns per unit of risk. OppFi Inc is currently generating about 0.08 per unit of volatility. If you would invest 225.00 in OppFi Inc on September 3, 2024 and sell it today you would earn a total of 591.00 from holding OppFi Inc or generate 262.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.14% |
| Values | Daily Returns |
Adaro Energy Tbk vs. OppFi Inc
Performance |
| Timeline |
| Adaro Energy Tbk |
| OppFi Inc |
Adaro Energy and OppFi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Energy and OppFi
The main advantage of trading using opposite Adaro Energy and OppFi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Energy position performs unexpectedly, OppFi 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 OppFi will offset losses from the drop in OppFi's long position.| Adaro Energy vs. Thungela Resources Limited | Adaro Energy vs. Geo Energy Resources | Adaro Energy vs. Bukit Asam Tbk | Adaro Energy vs. China Shenhua Energy |
| OppFi vs. Highway Holdings Limited | OppFi vs. QCR Holdings | OppFi vs. Partner Communications | OppFi vs. Acumen Pharmaceuticals |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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