Correlation Between Alliance Resource and Bukit Asam
Can any of the company-specific risk be diversified away by investing in both Alliance Resource and Bukit Asam 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 Alliance Resource and Bukit Asam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Resource Partners and Bukit Asam Tbk, you can compare the effects of market volatilities on Alliance Resource and Bukit Asam 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 Alliance Resource with a short position of Bukit Asam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Resource and Bukit Asam.
Diversification Opportunities for Alliance Resource and Bukit Asam
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alliance and Bukit is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Resource Partners and Bukit Asam Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Asam Tbk and Alliance Resource 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 Alliance Resource Partners are associated (or correlated) with Bukit Asam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Asam Tbk has no effect on the direction of Alliance Resource i.e., Alliance Resource and Bukit Asam go up and down completely randomly.
Pair Corralation between Alliance Resource and Bukit Asam
If you would invest 2,485 in Alliance Resource Partners on August 25, 2024 and sell it today you would earn a total of 364.00 from holding Alliance Resource Partners or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alliance Resource Partners vs. Bukit Asam Tbk
Performance |
| Timeline |
| Alliance Resource |
| Bukit Asam Tbk |
Alliance Resource and Bukit Asam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Resource and Bukit Asam
The main advantage of trading using opposite Alliance Resource and Bukit Asam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Resource position performs unexpectedly, Bukit Asam 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 Bukit Asam will offset losses from the drop in Bukit Asam's long position.| Alliance Resource vs. Peabody Energy Corp | Alliance Resource vs. Natural Resource Partners | Alliance Resource vs. Hallador Energy | Alliance Resource vs. NACCO Industries |
| Bukit Asam vs. Morien Resources Corp | Bukit Asam vs. Adaro Energy Tbk | Bukit Asam vs. Alliance Resource Partners | Bukit Asam vs. Astera Labs, Common |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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