Correlation Between Adaro Energy and Soechi Lines
Can any of the company-specific risk be diversified away by investing in both Adaro Energy and Soechi Lines 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 Soechi Lines 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 Soechi Lines Tbk, you can compare the effects of market volatilities on Adaro Energy and Soechi Lines 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 Soechi Lines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Energy and Soechi Lines.
Diversification Opportunities for Adaro Energy and Soechi Lines
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adaro and Soechi is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Energy Tbk and Soechi Lines Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soechi Lines Tbk 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 Soechi Lines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soechi Lines Tbk has no effect on the direction of Adaro Energy i.e., Adaro Energy and Soechi Lines go up and down completely randomly.
Pair Corralation between Adaro Energy and Soechi Lines
Assuming the 90 days trading horizon Adaro Energy Tbk is expected to under-perform the Soechi Lines. In addition to that, Adaro Energy is 1.89 times more volatile than Soechi Lines Tbk. It trades about -0.03 of its total potential returns per unit of risk. Soechi Lines Tbk is currently generating about 0.16 per unit of volatility. If you would invest 15,800 in Soechi Lines Tbk on October 20, 2024 and sell it today you would earn a total of 500.00 from holding Soechi Lines Tbk or generate 3.16% 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. Soechi Lines Tbk
Performance |
| Timeline |
| Adaro Energy Tbk |
| Soechi Lines Tbk |
Adaro Energy and Soechi Lines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Energy and Soechi Lines
The main advantage of trading using opposite Adaro Energy and Soechi Lines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Energy position performs unexpectedly, Soechi Lines 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 Soechi Lines will offset losses from the drop in Soechi Lines' 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 |
| Soechi Lines vs. Samudera Indonesia Tbk | Soechi Lines vs. Buana Listya Tama | Soechi Lines vs. Mitrabahtera Segara Sejati | Soechi Lines vs. Bekasi Fajar Industrial |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Global Correlations Find global opportunities by holding instruments from different markets |