Correlation Between Alfa Energi and Atlas Resources
Can any of the company-specific risk be diversified away by investing in both Alfa Energi and Atlas Resources 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 Alfa Energi and Atlas Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Energi Investama and Atlas Resources Tbk, you can compare the effects of market volatilities on Alfa Energi and Atlas Resources 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 Alfa Energi with a short position of Atlas Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Energi and Atlas Resources.
Diversification Opportunities for Alfa Energi and Atlas Resources
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alfa and Atlas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Energi Investama and Atlas Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Resources Tbk and Alfa Energi 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 Alfa Energi Investama are associated (or correlated) with Atlas Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Resources Tbk has no effect on the direction of Alfa Energi i.e., Alfa Energi and Atlas Resources go up and down completely randomly.
Pair Corralation between Alfa Energi and Atlas Resources
Assuming the 90 days trading horizon Alfa Energi Investama is expected to generate 1.43 times more return on investment than Atlas Resources. However, Alfa Energi is 1.43 times more volatile than Atlas Resources Tbk. It trades about 0.02 of its potential returns per unit of risk. Atlas Resources Tbk is currently generating about 0.02 per unit of risk. 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 |
Alfa Energi Investama vs. Atlas Resources Tbk
Performance |
| Timeline |
| Alfa Energi Investama |
| Atlas Resources Tbk |
Alfa Energi and Atlas Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Energi and Atlas Resources
The main advantage of trading using opposite Alfa Energi and Atlas Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Energi position performs unexpectedly, Atlas Resources 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 Atlas Resources will offset losses from the drop in Atlas Resources' long position.| Alfa Energi vs. Borneo Olah Sarana | Alfa Energi vs. Kapuas Prima Coal | Alfa Energi vs. Central Omega Resources | Alfa Energi vs. Buana Listya Tama |
| Atlas Resources vs. Baramulti Suksessarana Tbk | Atlas Resources vs. TBS Energi Utama | Atlas Resources vs. Bayan Resources Tbk | Atlas Resources vs. Resource Alam Indonesia |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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