Correlation Between Adaro Energy and Trisula International
Can any of the company-specific risk be diversified away by investing in both Adaro Energy and Trisula International 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 Trisula International 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 Trisula International Tbk, you can compare the effects of market volatilities on Adaro Energy and Trisula International 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 Trisula International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Energy and Trisula International.
Diversification Opportunities for Adaro Energy and Trisula International
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Adaro and Trisula is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Energy Tbk and Trisula International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisula International 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 Trisula International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisula International Tbk has no effect on the direction of Adaro Energy i.e., Adaro Energy and Trisula International go up and down completely randomly.
Pair Corralation between Adaro Energy and Trisula International
Assuming the 90 days trading horizon Adaro Energy Tbk is expected to under-perform the Trisula International. In addition to that, Adaro Energy is 1.28 times more volatile than Trisula International Tbk. It trades about -0.04 of its total potential returns per unit of risk. Trisula International Tbk is currently generating about 0.09 per unit of volatility. If you would invest 16,600 in Trisula International Tbk on October 21, 2024 and sell it today you would earn a total of 400.00 from holding Trisula International Tbk or generate 2.41% 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. Trisula International Tbk
Performance |
| Timeline |
| Adaro Energy Tbk |
| Trisula International Tbk |
Adaro Energy and Trisula International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Energy and Trisula International
The main advantage of trading using opposite Adaro Energy and Trisula International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Energy position performs unexpectedly, Trisula International 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 Trisula International will offset losses from the drop in Trisula International'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 |
| Trisula International vs. Surya Permata Andalan | Trisula International vs. Aneka Gas Industri | Trisula International vs. Buana Listya Tama | Trisula International vs. Trisula Textile Industries |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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