Correlation Between Exxaro Resources and Indo Tambangraya
Can any of the company-specific risk be diversified away by investing in both Exxaro Resources and Indo Tambangraya 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 Exxaro Resources and Indo Tambangraya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxaro Resources Limited and Indo Tambangraya Megah, you can compare the effects of market volatilities on Exxaro Resources and Indo Tambangraya 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 Exxaro Resources with a short position of Indo Tambangraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxaro Resources and Indo Tambangraya.
Diversification Opportunities for Exxaro Resources and Indo Tambangraya
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exxaro and Indo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exxaro Resources Limited and Indo Tambangraya Megah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Tambangraya Megah and Exxaro 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 Exxaro Resources Limited are associated (or correlated) with Indo Tambangraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Tambangraya Megah has no effect on the direction of Exxaro Resources i.e., Exxaro Resources and Indo Tambangraya go up and down completely randomly.
Pair Corralation between Exxaro Resources and Indo Tambangraya
If you would invest (100.00) in Exxaro Resources Limited on November 27, 2024 and sell it today you would earn a total of 100.00 from holding Exxaro Resources Limited or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Exxaro Resources Limited vs. Indo Tambangraya Megah
Performance |
| Timeline |
| Exxaro Resources |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Indo Tambangraya Megah |
Exxaro Resources and Indo Tambangraya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxaro Resources and Indo Tambangraya
The main advantage of trading using opposite Exxaro Resources and Indo Tambangraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxaro Resources position performs unexpectedly, Indo Tambangraya 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 Indo Tambangraya will offset losses from the drop in Indo Tambangraya's long position.| Exxaro Resources vs. Yancoal Australia | Exxaro Resources vs. China Coal Energy | Exxaro Resources vs. Bukit Asam Tbk | Exxaro Resources vs. Indo Tambangraya Megah |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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