Correlation Between Indo Tambangraya and PT Adaro
Can any of the company-specific risk be diversified away by investing in both Indo Tambangraya and PT Adaro 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 PT Adaro 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 PT Adaro Energy, you can compare the effects of market volatilities on Indo Tambangraya and PT Adaro 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 PT Adaro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Tambangraya and PT Adaro.
Diversification Opportunities for Indo Tambangraya and PT Adaro
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indo and PADEF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indo Tambangraya Megah and PT Adaro Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Adaro Energy 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 PT Adaro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Adaro Energy has no effect on the direction of Indo Tambangraya i.e., Indo Tambangraya and PT Adaro go up and down completely randomly.
Pair Corralation between Indo Tambangraya and PT Adaro
If you would invest (100.00) in PT Adaro Energy on November 27, 2024 and sell it today you would earn a total of 100.00 from holding PT Adaro Energy or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Indo Tambangraya Megah vs. PT Adaro Energy
Performance |
| Timeline |
| Indo Tambangraya Megah |
| PT Adaro Energy |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Indo Tambangraya and PT Adaro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Tambangraya and PT Adaro
The main advantage of trading using opposite Indo Tambangraya and PT Adaro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Tambangraya position performs unexpectedly, PT Adaro 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 PT Adaro will offset losses from the drop in PT Adaro's long position.| Indo Tambangraya vs. Adaro Energy Tbk | Indo Tambangraya vs. Geo Energy Resources | Indo Tambangraya vs. Bukit Asam Tbk | Indo Tambangraya vs. New Hope |
| PT Adaro vs. Geo Energy Resources | PT Adaro vs. Yanzhou Coal Mining | PT Adaro vs. Indo Tambangraya Megah | PT Adaro vs. Bukit Asam 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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