Correlation Between AKR Corporindo and Adams Resources
Can any of the company-specific risk be diversified away by investing in both AKR Corporindo and Adams 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 AKR Corporindo and Adams Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKR Corporindo Tbk and Adams Resources Energy, you can compare the effects of market volatilities on AKR Corporindo and Adams 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 AKR Corporindo with a short position of Adams Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKR Corporindo and Adams Resources.
Diversification Opportunities for AKR Corporindo and Adams Resources
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AKR and Adams is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding AKR Corporindo Tbk and Adams Resources Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Resources Energy and AKR Corporindo 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 AKR Corporindo Tbk are associated (or correlated) with Adams Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Resources Energy has no effect on the direction of AKR Corporindo i.e., AKR Corporindo and Adams Resources go up and down completely randomly.
Pair Corralation between AKR Corporindo and Adams Resources
If you would invest 3,696 in Adams Resources Energy on October 23, 2024 and sell it today you would earn a total of 45.00 from holding Adams Resources Energy or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.63% |
| Values | Daily Returns |
AKR Corporindo Tbk vs. Adams Resources Energy
Performance |
| Timeline |
| AKR Corporindo Tbk |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Adams Resources Energy |
AKR Corporindo and Adams Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKR Corporindo and Adams Resources
The main advantage of trading using opposite AKR Corporindo and Adams Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKR Corporindo position performs unexpectedly, Adams 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 Adams Resources will offset losses from the drop in Adams Resources' long position.The idea behind AKR Corporindo Tbk and Adams Resources Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Adams Resources vs. PrimeEnergy | Adams Resources vs. Barnwell Industries | Adams Resources vs. Acme United | Adams Resources vs. CKX Lands |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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