Correlation Between Indo Tambangraya and Elnusa Tbk
Can any of the company-specific risk be diversified away by investing in both Indo Tambangraya and Elnusa Tbk 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 Elnusa Tbk 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 Elnusa Tbk, you can compare the effects of market volatilities on Indo Tambangraya and Elnusa Tbk 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 Elnusa Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Tambangraya and Elnusa Tbk.
Diversification Opportunities for Indo Tambangraya and Elnusa Tbk
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indo and Elnusa is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Indo Tambangraya Megah and Elnusa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elnusa 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 Elnusa Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elnusa Tbk has no effect on the direction of Indo Tambangraya i.e., Indo Tambangraya and Elnusa Tbk go up and down completely randomly.
Pair Corralation between Indo Tambangraya and Elnusa Tbk
Assuming the 90 days trading horizon Indo Tambangraya Megah is expected to generate 0.62 times more return on investment than Elnusa Tbk. However, Indo Tambangraya Megah is 1.61 times less risky than Elnusa Tbk. It trades about 0.07 of its potential returns per unit of risk. Elnusa Tbk is currently generating about 0.03 per unit of risk. If you would invest 2,408,721 in Indo Tambangraya Megah on September 1, 2024 and sell it today you would earn a total of 256,279 from holding Indo Tambangraya Megah or generate 10.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Indo Tambangraya Megah vs. Elnusa Tbk
Performance |
| Timeline |
| Indo Tambangraya Megah |
| Elnusa Tbk |
Indo Tambangraya and Elnusa Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Tambangraya and Elnusa Tbk
The main advantage of trading using opposite Indo Tambangraya and Elnusa Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Tambangraya position performs unexpectedly, Elnusa Tbk 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 Elnusa Tbk will offset losses from the drop in Elnusa Tbk's long position.| Indo Tambangraya vs. Bukit Asam Tbk | Indo Tambangraya vs. Adaro Energy Tbk | Indo Tambangraya vs. United Tractors Tbk | Indo Tambangraya vs. Vale Indonesia Tbk |
| Elnusa Tbk vs. Mitrabahtera Segara Sejati | Elnusa Tbk vs. Weha Transportasi Indonesia | Elnusa Tbk vs. Rig Tenders Tbk | Elnusa Tbk vs. Rukun Raharja 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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