Correlation Between Adaro Energy and Thungela Resources
Can any of the company-specific risk be diversified away by investing in both Adaro Energy and Thungela Resources 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 Thungela Resources 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 Thungela Resources Limited, you can compare the effects of market volatilities on Adaro Energy and Thungela Resources 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 Thungela Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Energy and Thungela Resources.
Diversification Opportunities for Adaro Energy and Thungela Resources
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Adaro and Thungela is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Energy Tbk and Thungela Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thungela Resources 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 Thungela Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thungela Resources has no effect on the direction of Adaro Energy i.e., Adaro Energy and Thungela Resources go up and down completely randomly.
Pair Corralation between Adaro Energy and Thungela Resources
Assuming the 90 days horizon Adaro Energy Tbk is expected to generate 12.31 times more return on investment than Thungela Resources. However, Adaro Energy is 12.31 times more volatile than Thungela Resources Limited. It trades about 0.15 of its potential returns per unit of risk. Thungela Resources Limited is currently generating about 0.06 per unit of risk. If you would invest 454.00 in Adaro Energy Tbk on November 3, 2024 and sell it today you would earn a total of 256.00 from holding Adaro Energy Tbk or generate 56.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.71% |
| Values | Daily Returns |
Adaro Energy Tbk vs. Thungela Resources Limited
Performance |
| Timeline |
| Adaro Energy Tbk |
| Thungela Resources |
Adaro Energy and Thungela Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Energy and Thungela Resources
The main advantage of trading using opposite Adaro Energy and Thungela Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Energy position performs unexpectedly, Thungela Resources 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 Thungela Resources will offset losses from the drop in Thungela Resources' 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 |
| Thungela Resources vs. Adaro Energy Tbk | Thungela Resources vs. Geo Energy Resources | Thungela Resources vs. Bukit Asam Tbk | Thungela Resources vs. New Hope |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |