Correlation Between Harum Energy and Adi Sarana
Can any of the company-specific risk be diversified away by investing in both Harum Energy and Adi Sarana 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 Harum Energy and Adi Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harum Energy Tbk and Adi Sarana Armada, you can compare the effects of market volatilities on Harum Energy and Adi Sarana 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 Harum Energy with a short position of Adi Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harum Energy and Adi Sarana.
Diversification Opportunities for Harum Energy and Adi Sarana
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Harum and Adi is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Harum Energy Tbk and Adi Sarana Armada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adi Sarana Armada and Harum Energy 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 Harum Energy Tbk are associated (or correlated) with Adi Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adi Sarana Armada has no effect on the direction of Harum Energy i.e., Harum Energy and Adi Sarana go up and down completely randomly.
Pair Corralation between Harum Energy and Adi Sarana
Assuming the 90 days trading horizon Harum Energy Tbk is expected to under-perform the Adi Sarana. In addition to that, Harum Energy is 1.11 times more volatile than Adi Sarana Armada. It trades about -0.25 of its total potential returns per unit of risk. Adi Sarana Armada is currently generating about -0.01 per unit of volatility. If you would invest 72,973 in Adi Sarana Armada on August 24, 2024 and sell it today you would lose (973.00) from holding Adi Sarana Armada or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harum Energy Tbk vs. Adi Sarana Armada
Performance |
| Timeline |
| Harum Energy Tbk |
| Adi Sarana Armada |
Harum Energy and Adi Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harum Energy and Adi Sarana
The main advantage of trading using opposite Harum Energy and Adi Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harum Energy position performs unexpectedly, Adi Sarana 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 Adi Sarana will offset losses from the drop in Adi Sarana's long position.| Harum Energy vs. Indo Tambangraya Megah | Harum Energy vs. Indika Energy Tbk | Harum Energy vs. Adaro Energy Tbk | Harum Energy vs. Akr Corporindo Tbk |
| Adi Sarana vs. Samudera Indonesia Tbk | Adi Sarana vs. Rukun Raharja Tbk | Adi Sarana vs. PT Temas Tbk | Adi Sarana vs. Weha Transportasi 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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