Correlation Between Atlas Resources and Alfa Energi
Can any of the company-specific risk be diversified away by investing in both Atlas Resources and Alfa Energi 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 Atlas Resources and Alfa Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Resources Tbk and Alfa Energi Investama, you can compare the effects of market volatilities on Atlas Resources and Alfa Energi 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 Atlas Resources with a short position of Alfa Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Resources and Alfa Energi.
Diversification Opportunities for Atlas Resources and Alfa Energi
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Atlas and Alfa is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Resources Tbk and Alfa Energi Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Energi Investama and Atlas Resources 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 Atlas Resources Tbk are associated (or correlated) with Alfa Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Energi Investama has no effect on the direction of Atlas Resources i.e., Atlas Resources and Alfa Energi go up and down completely randomly.
Pair Corralation between Atlas Resources and Alfa Energi
Assuming the 90 days trading horizon Atlas Resources is expected to generate 1.54 times less return on investment than Alfa Energi. But when comparing it to its historical volatility, Atlas Resources Tbk is 1.43 times less risky than Alfa Energi. It trades about 0.02 of its potential returns per unit of risk. Alfa Energi Investama is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,400 in Alfa Energi Investama on August 27, 2024 and sell it today you would lose (2,400) from holding Alfa Energi Investama or give up 21.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Resources Tbk vs. Alfa Energi Investama
Performance |
| Timeline |
| Atlas Resources Tbk |
| Alfa Energi Investama |
Atlas Resources and Alfa Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Resources and Alfa Energi
The main advantage of trading using opposite Atlas Resources and Alfa Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Resources position performs unexpectedly, Alfa Energi 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 Alfa Energi will offset losses from the drop in Alfa Energi's long position.| Atlas Resources vs. Baramulti Suksessarana Tbk | Atlas Resources vs. TBS Energi Utama | Atlas Resources vs. Bayan Resources Tbk | Atlas Resources vs. Resource Alam Indonesia |
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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.
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