Correlation Between Indo Tambangraya and Adaro Energy
Can any of the company-specific risk be diversified away by investing in both Indo Tambangraya and Adaro Energy 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 Indo Tambangraya and Adaro Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Tambangraya Megah and Adaro Energy Tbk, you can compare the effects of market volatilities on Indo Tambangraya and Adaro Energy 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 Indo Tambangraya with a short position of Adaro Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Tambangraya and Adaro Energy.
Diversification Opportunities for Indo Tambangraya and Adaro Energy
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indo and Adaro is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Indo Tambangraya Megah and Adaro Energy Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaro Energy Tbk and Indo Tambangraya 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 Indo Tambangraya Megah are associated (or correlated) with Adaro Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaro Energy Tbk has no effect on the direction of Indo Tambangraya i.e., Indo Tambangraya and Adaro Energy go up and down completely randomly.
Pair Corralation between Indo Tambangraya and Adaro Energy
Assuming the 90 days horizon Indo Tambangraya Megah is expected to generate 0.61 times more return on investment than Adaro Energy. However, Indo Tambangraya Megah is 1.63 times less risky than Adaro Energy. It trades about 0.07 of its potential returns per unit of risk. Adaro Energy Tbk is currently generating about 0.0 per unit of risk. If you would invest 326.00 in Indo Tambangraya Megah on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Indo Tambangraya Megah or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Tambangraya Megah vs. Adaro Energy Tbk
Performance |
| Timeline |
| Indo Tambangraya Megah |
| Adaro Energy Tbk |
Indo Tambangraya and Adaro Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Tambangraya and Adaro Energy
The main advantage of trading using opposite Indo Tambangraya and Adaro Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Tambangraya position performs unexpectedly, Adaro Energy 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 Adaro Energy will offset losses from the drop in Adaro Energy's long position.| Indo Tambangraya vs. Alliance Resource Partners | Indo Tambangraya vs. Astera Labs, Common | Indo Tambangraya vs. Autodesk | Indo Tambangraya vs. Applied Blockchain |
| Adaro Energy vs. Alliance Resource Partners | Adaro Energy vs. Astera Labs, Common | Adaro Energy vs. Autodesk | Adaro Energy vs. Applied Blockchain |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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