Correlation Between HEXINDO ADIPERKASA and TransAlta
Can any of the company-specific risk be diversified away by investing in both HEXINDO ADIPERKASA and TransAlta 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 HEXINDO ADIPERKASA and TransAlta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEXINDO ADIPERKASA and TransAlta, you can compare the effects of market volatilities on HEXINDO ADIPERKASA and TransAlta 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 HEXINDO ADIPERKASA with a short position of TransAlta. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEXINDO ADIPERKASA and TransAlta.
Diversification Opportunities for HEXINDO ADIPERKASA and TransAlta
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HEXINDO and TransAlta is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding HEXINDO ADIPERKASA and TransAlta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAlta and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA are associated (or correlated) with TransAlta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAlta has no effect on the direction of HEXINDO ADIPERKASA i.e., HEXINDO ADIPERKASA and TransAlta go up and down completely randomly.
Pair Corralation between HEXINDO ADIPERKASA and TransAlta
Assuming the 90 days trading horizon HEXINDO ADIPERKASA is expected to under-perform the TransAlta. In addition to that, HEXINDO ADIPERKASA is 1.18 times more volatile than TransAlta. It trades about -0.03 of its total potential returns per unit of risk. TransAlta is currently generating about 0.16 per unit of volatility. If you would invest 645.00 in TransAlta on September 1, 2024 and sell it today you would earn a total of 401.00 from holding TransAlta or generate 62.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEXINDO ADIPERKASA vs. TransAlta
Performance |
| Timeline |
| HEXINDO ADIPERKASA |
| TransAlta |
HEXINDO ADIPERKASA and TransAlta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEXINDO ADIPERKASA and TransAlta
The main advantage of trading using opposite HEXINDO ADIPERKASA and TransAlta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEXINDO ADIPERKASA position performs unexpectedly, TransAlta 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 TransAlta will offset losses from the drop in TransAlta's long position.| HEXINDO ADIPERKASA vs. SIVERS SEMICONDUCTORS AB | HEXINDO ADIPERKASA vs. Darden Restaurants | HEXINDO ADIPERKASA vs. Reliance Steel Aluminum | HEXINDO ADIPERKASA vs. Q2M Managementberatung AG |
| TransAlta vs. Perseus Mining Limited | TransAlta vs. MCEWEN MINING INC | TransAlta vs. Grupo Carso SAB | TransAlta vs. Commercial Vehicle Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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