Correlation Between Indo Tambangraya and Thungela Resources
Can any of the company-specific risk be diversified away by investing in both Indo Tambangraya and Thungela Resources 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 Thungela Resources 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 Thungela Resources Limited, you can compare the effects of market volatilities on Indo Tambangraya and Thungela Resources 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 Thungela Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Tambangraya and Thungela Resources.
Diversification Opportunities for Indo Tambangraya and Thungela Resources
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indo and Thungela is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Indo Tambangraya Megah and Thungela Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thungela Resources 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 Thungela Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thungela Resources has no effect on the direction of Indo Tambangraya i.e., Indo Tambangraya and Thungela Resources go up and down completely randomly.
Pair Corralation between Indo Tambangraya and Thungela Resources
Assuming the 90 days horizon Indo Tambangraya Megah is expected to generate 1.9 times more return on investment than Thungela Resources. However, Indo Tambangraya is 1.9 times more volatile than Thungela Resources Limited. It trades about -0.13 of its potential returns per unit of risk. Thungela Resources Limited is currently generating about -0.29 per unit of risk. If you would invest 326.00 in Indo Tambangraya Megah on November 27, 2024 and sell it today you would lose (46.00) from holding Indo Tambangraya Megah or give up 14.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Indo Tambangraya Megah vs. Thungela Resources Limited
Performance |
| Timeline |
| Indo Tambangraya Megah |
| Thungela Resources |
Indo Tambangraya and Thungela Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Tambangraya and Thungela Resources
The main advantage of trading using opposite Indo Tambangraya and Thungela Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Tambangraya position performs unexpectedly, Thungela Resources 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 Thungela Resources will offset losses from the drop in Thungela Resources' 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 |
| Thungela Resources vs. Adaro Energy Tbk | Thungela Resources vs. Geo Energy Resources | Thungela Resources vs. Bukit Asam Tbk | Thungela Resources vs. New Hope |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |