Correlation Between AKR Corporindo and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both AKR Corporindo and Neste Oyj 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 Neste Oyj 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 Neste Oyj, you can compare the effects of market volatilities on AKR Corporindo and Neste Oyj 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 Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKR Corporindo and Neste Oyj.
Diversification Opportunities for AKR Corporindo and Neste Oyj
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AKR and Neste is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding AKR Corporindo Tbk and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj 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 Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of AKR Corporindo i.e., AKR Corporindo and Neste Oyj go up and down completely randomly.
Pair Corralation between AKR Corporindo and Neste Oyj
If you would invest 210.00 in AKR Corporindo Tbk on August 30, 2024 and sell it today you would earn a total of 0.00 from holding AKR Corporindo Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKR Corporindo Tbk vs. Neste Oyj
Performance |
| Timeline |
| AKR Corporindo Tbk |
| Neste Oyj |
AKR Corporindo and Neste Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKR Corporindo and Neste Oyj
The main advantage of trading using opposite AKR Corporindo and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKR Corporindo position performs unexpectedly, Neste Oyj 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.The idea behind AKR Corporindo Tbk and Neste Oyj 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.| Neste Oyj vs. HF Sinclair Corp | Neste Oyj vs. PBF Energy | Neste Oyj vs. Delek Energy | Neste Oyj vs. CVR 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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