Correlation Between Adaro Energy and Bekasi Fajar
Can any of the company-specific risk be diversified away by investing in both Adaro Energy and Bekasi Fajar 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 Bekasi Fajar 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 Bekasi Fajar Industrial, you can compare the effects of market volatilities on Adaro Energy and Bekasi Fajar 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 Bekasi Fajar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Energy and Bekasi Fajar.
Diversification Opportunities for Adaro Energy and Bekasi Fajar
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Adaro and Bekasi is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Energy Tbk and Bekasi Fajar Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bekasi Fajar Industrial 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 Bekasi Fajar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bekasi Fajar Industrial has no effect on the direction of Adaro Energy i.e., Adaro Energy and Bekasi Fajar go up and down completely randomly.
Pair Corralation between Adaro Energy and Bekasi Fajar
Assuming the 90 days trading horizon Adaro Energy Tbk is expected to generate 2.97 times more return on investment than Bekasi Fajar. However, Adaro Energy is 2.97 times more volatile than Bekasi Fajar Industrial. It trades about 0.07 of its potential returns per unit of risk. Bekasi Fajar Industrial is currently generating about -0.11 per unit of risk. If you would invest 175,155 in Adaro Energy Tbk on November 2, 2024 and sell it today you would earn a total of 54,845 from holding Adaro Energy Tbk or generate 31.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adaro Energy Tbk vs. Bekasi Fajar Industrial
Performance |
| Timeline |
| Adaro Energy Tbk |
| Bekasi Fajar Industrial |
Adaro Energy and Bekasi Fajar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Energy and Bekasi Fajar
The main advantage of trading using opposite Adaro Energy and Bekasi Fajar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Energy position performs unexpectedly, Bekasi Fajar 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 Bekasi Fajar will offset losses from the drop in Bekasi Fajar's long position.| Adaro Energy vs. Bukit Asam Tbk | Adaro Energy vs. Aneka Tambang Persero | Adaro Energy vs. Perusahaan Gas Negara | Adaro Energy vs. Indo Tambangraya Megah |
| Bekasi Fajar vs. Agung Podomoro Land | Bekasi Fajar vs. Surya Semesta Internusa | Bekasi Fajar vs. Alam Sutera Realty | Bekasi Fajar vs. Bumi Serpong Damai |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |