Correlation Between PT Bank and Adaro Energy
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Adaro Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Central and Adaro Energy Tbk, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Adaro Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Adaro Energy.
Diversification Opportunities for PT Bank and Adaro Energy
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PBCRF and Adaro is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central 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 PT Bank 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 PT Bank Central 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 PT Bank i.e., PT Bank and Adaro Energy go up and down completely randomly.
Pair Corralation between PT Bank and Adaro Energy
Assuming the 90 days horizon PT Bank is expected to generate 5.13 times less return on investment than Adaro Energy. But when comparing it to its historical volatility, PT Bank Central is 1.56 times less risky than Adaro Energy. It trades about 0.02 of its potential returns per unit of risk. Adaro Energy Tbk is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 333.00 in Adaro Energy Tbk on November 9, 2024 and sell it today you would earn a total of 389.00 from holding Adaro Energy Tbk or generate 116.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.75% |
| Values | Daily Returns |
PT Bank Central vs. Adaro Energy Tbk
Performance |
| Timeline |
| PT Bank Central |
| Adaro Energy Tbk |
PT Bank and Adaro Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Adaro Energy
The main advantage of trading using opposite PT Bank and Adaro Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. IF Bancorp | PT Bank vs. Home Bancorp | PT Bank vs. ConnectOne Bancorp | PT Bank vs. First Northwest Bancorp |
| Adaro Energy vs. Thungela Resources Limited | Adaro Energy vs. Geo Energy Resources | Adaro Energy vs. Bukit Asam Tbk | Adaro Energy vs. China Shenhua Energy |
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.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |