Correlation Between Adaro Energy and Mitra Keluarga
Can any of the company-specific risk be diversified away by investing in both Adaro Energy and Mitra Keluarga 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 Mitra Keluarga 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 Mitra Keluarga Karyasehat, you can compare the effects of market volatilities on Adaro Energy and Mitra Keluarga 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 Mitra Keluarga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Energy and Mitra Keluarga.
Diversification Opportunities for Adaro Energy and Mitra Keluarga
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Adaro and Mitra is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Energy Tbk and Mitra Keluarga Karyasehat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitra Keluarga Karyasehat 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 Mitra Keluarga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitra Keluarga Karyasehat has no effect on the direction of Adaro Energy i.e., Adaro Energy and Mitra Keluarga go up and down completely randomly.
Pair Corralation between Adaro Energy and Mitra Keluarga
Assuming the 90 days trading horizon Adaro Energy Tbk is expected to under-perform the Mitra Keluarga. In addition to that, Adaro Energy is 4.48 times more volatile than Mitra Keluarga Karyasehat. It trades about -0.29 of its total potential returns per unit of risk. Mitra Keluarga Karyasehat is currently generating about -0.08 per unit of volatility. If you would invest 271,000 in Mitra Keluarga Karyasehat on September 1, 2024 and sell it today you would lose (9,000) from holding Mitra Keluarga Karyasehat or give up 3.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adaro Energy Tbk vs. Mitra Keluarga Karyasehat
Performance |
| Timeline |
| Adaro Energy Tbk |
| Mitra Keluarga Karyasehat |
Adaro Energy and Mitra Keluarga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Energy and Mitra Keluarga
The main advantage of trading using opposite Adaro Energy and Mitra Keluarga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Energy position performs unexpectedly, Mitra Keluarga 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 Mitra Keluarga will offset losses from the drop in Mitra Keluarga'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 |
| Mitra Keluarga vs. Merdeka Copper Gold | Mitra Keluarga vs. Tower Bersama Infrastructure | Mitra Keluarga vs. Erajaya Swasembada Tbk | Mitra Keluarga vs. Surya Citra Media |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |