Correlation Between Harum Energy and Indo Tambangraya
Can any of the company-specific risk be diversified away by investing in both Harum Energy 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 Harum Energy and Indo Tambangraya 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 Indo Tambangraya Megah, you can compare the effects of market volatilities on Harum Energy 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 Harum Energy with a short position of Indo Tambangraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harum Energy and Indo Tambangraya.
Diversification Opportunities for Harum Energy and Indo Tambangraya
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Harum and Indo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Harum Energy Tbk 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 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 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 Harum Energy i.e., Harum Energy and Indo Tambangraya go up and down completely randomly.
Pair Corralation between Harum Energy and Indo Tambangraya
Assuming the 90 days trading horizon Harum Energy Tbk is expected to under-perform the Indo Tambangraya. In addition to that, Harum Energy is 1.74 times more volatile than Indo Tambangraya Megah. It trades about -0.2 of its total potential returns per unit of risk. Indo Tambangraya Megah is currently generating about 0.28 per unit of volatility. If you would invest 2,552,500 in Indo Tambangraya Megah on August 28, 2024 and sell it today you would earn a total of 190,000 from holding Indo Tambangraya Megah or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harum Energy Tbk vs. Indo Tambangraya Megah
Performance |
| Timeline |
| Harum Energy Tbk |
| Indo Tambangraya Megah |
Harum Energy and Indo Tambangraya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harum Energy and Indo Tambangraya
The main advantage of trading using opposite Harum Energy and Indo Tambangraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harum Energy 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.| Harum Energy vs. Indo Tambangraya Megah | Harum Energy vs. Indika Energy Tbk | Harum Energy vs. Adaro Energy Tbk | Harum Energy vs. Akr Corporindo Tbk |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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