Correlation Between AIM Energy and Adaro Energy
Can any of the company-specific risk be diversified away by investing in both AIM Energy and Adaro Energy 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 AIM Energy and Adaro Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM Energy and Adaro Energy Tbk, you can compare the effects of market volatilities on AIM Energy and Adaro Energy 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 AIM Energy with a short position of Adaro Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM Energy and Adaro Energy.
Diversification Opportunities for AIM Energy and Adaro Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIM and Adaro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AIM Energy and Adaro Energy Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaro Energy Tbk and AIM 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 AIM Energy are associated (or correlated) with Adaro Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaro Energy Tbk has no effect on the direction of AIM Energy i.e., AIM Energy and Adaro Energy go up and down completely randomly.
Pair Corralation between AIM Energy and Adaro Energy
If you would invest 515.00 in Adaro Energy Tbk on November 2, 2024 and sell it today you would earn a total of 198.00 from holding Adaro Energy Tbk or generate 38.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
AIM Energy vs. Adaro Energy Tbk
Performance |
| Timeline |
| AIM Energy |
| Adaro Energy Tbk |
AIM Energy and Adaro Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM Energy and Adaro Energy
The main advantage of trading using opposite AIM Energy and Adaro Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM Energy position performs unexpectedly, Adaro Energy 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 Adaro Energy will offset losses from the drop in Adaro Energy's long position.| AIM Energy vs. Adaro Energy Tbk | AIM Energy vs. Alliance Resource Partners | AIM Energy vs. Indo Tambangraya Megah | AIM Energy vs. Yanzhou Coal Mining |
| Adaro Energy vs. Thungela Resources Limited | Adaro Energy vs. Geo Energy Resources | Adaro Energy vs. Bukit Asam Tbk | Adaro Energy vs. China Shenhua Energy |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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