Correlation Between Autopedia Sukses and Adaro Minerals
Can any of the company-specific risk be diversified away by investing in both Autopedia Sukses and Adaro Minerals 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 Autopedia Sukses and Adaro Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autopedia Sukses Lestari and Adaro Minerals Indonesia, you can compare the effects of market volatilities on Autopedia Sukses and Adaro Minerals 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 Autopedia Sukses with a short position of Adaro Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autopedia Sukses and Adaro Minerals.
Diversification Opportunities for Autopedia Sukses and Adaro Minerals
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Autopedia and Adaro is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Autopedia Sukses Lestari and Adaro Minerals Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaro Minerals Indonesia and Autopedia Sukses 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 Autopedia Sukses Lestari are associated (or correlated) with Adaro Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaro Minerals Indonesia has no effect on the direction of Autopedia Sukses i.e., Autopedia Sukses and Adaro Minerals go up and down completely randomly.
Pair Corralation between Autopedia Sukses and Adaro Minerals
Assuming the 90 days trading horizon Autopedia Sukses Lestari is expected to under-perform the Adaro Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Autopedia Sukses Lestari is 1.55 times less risky than Adaro Minerals. The stock trades about -0.47 of its potential returns per unit of risk. The Adaro Minerals Indonesia is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 144,000 in Adaro Minerals Indonesia on August 24, 2024 and sell it today you would lose (12,500) from holding Adaro Minerals Indonesia or give up 8.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autopedia Sukses Lestari vs. Adaro Minerals Indonesia
Performance |
| Timeline |
| Autopedia Sukses Lestari |
| Adaro Minerals Indonesia |
Autopedia Sukses and Adaro Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autopedia Sukses and Adaro Minerals
The main advantage of trading using opposite Autopedia Sukses and Adaro Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autopedia Sukses position performs unexpectedly, Adaro Minerals 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 Minerals will offset losses from the drop in Adaro Minerals' long position.| Autopedia Sukses vs. Adaro Minerals Indonesia | Autopedia Sukses vs. Dharma Polimetal Tbk | Autopedia Sukses vs. Wir Asia Tbk | Autopedia Sukses vs. Adi Sarana Armada |
| Adaro Minerals vs. Bank Artos Indonesia | Adaro Minerals vs. GoTo Gojek Tokopedia | Adaro Minerals vs. Elang Mahkota Teknologi | Adaro Minerals vs. PT Bukalapak |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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