Correlation Between Samindo Resources and Resource Alam
Can any of the company-specific risk be diversified away by investing in both Samindo Resources and Resource Alam 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 Samindo Resources and Resource Alam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samindo Resources Tbk and Resource Alam Indonesia, you can compare the effects of market volatilities on Samindo Resources and Resource Alam 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 Samindo Resources with a short position of Resource Alam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samindo Resources and Resource Alam.
Diversification Opportunities for Samindo Resources and Resource Alam
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samindo and Resource is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Samindo Resources Tbk and Resource Alam Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resource Alam Indonesia and Samindo Resources 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 Samindo Resources Tbk are associated (or correlated) with Resource Alam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resource Alam Indonesia has no effect on the direction of Samindo Resources i.e., Samindo Resources and Resource Alam go up and down completely randomly.
Pair Corralation between Samindo Resources and Resource Alam
Assuming the 90 days trading horizon Samindo Resources Tbk is expected to under-perform the Resource Alam. But the stock apears to be less risky and, when comparing its historical volatility, Samindo Resources Tbk is 1.37 times less risky than Resource Alam. The stock trades about -0.04 of its potential returns per unit of risk. The Resource Alam Indonesia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 45,171 in Resource Alam Indonesia on August 29, 2024 and sell it today you would earn a total of 6,829 from holding Resource Alam Indonesia or generate 15.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samindo Resources Tbk vs. Resource Alam Indonesia
Performance |
| Timeline |
| Samindo Resources Tbk |
| Resource Alam Indonesia |
Samindo Resources and Resource Alam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samindo Resources and Resource Alam
The main advantage of trading using opposite Samindo Resources and Resource Alam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samindo Resources position performs unexpectedly, Resource Alam 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 Resource Alam will offset losses from the drop in Resource Alam's long position.| Samindo Resources vs. Resource Alam Indonesia | Samindo Resources vs. Petrosea Tbk | Samindo Resources vs. Kmi Wire And | Samindo Resources vs. Mitrabara Adiperdana PT |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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