Correlation Between Putra Mandiri and Adaro Minerals
Can any of the company-specific risk be diversified away by investing in both Putra Mandiri and Adaro Minerals 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 Putra Mandiri and Adaro Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putra Mandiri Jembar and Adaro Minerals Indonesia, you can compare the effects of market volatilities on Putra Mandiri and Adaro Minerals 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 Putra Mandiri with a short position of Adaro Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putra Mandiri and Adaro Minerals.
Diversification Opportunities for Putra Mandiri and Adaro Minerals
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Putra and Adaro is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Putra Mandiri Jembar and Adaro Minerals Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaro Minerals Indonesia and Putra Mandiri 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 Putra Mandiri Jembar are associated (or correlated) with Adaro Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaro Minerals Indonesia has no effect on the direction of Putra Mandiri i.e., Putra Mandiri and Adaro Minerals go up and down completely randomly.
Pair Corralation between Putra Mandiri and Adaro Minerals
Assuming the 90 days trading horizon Putra Mandiri Jembar is expected to generate 1.16 times more return on investment than Adaro Minerals. However, Putra Mandiri is 1.16 times more volatile than Adaro Minerals Indonesia. It trades about -0.02 of its potential returns per unit of risk. Adaro Minerals Indonesia is currently generating about -0.46 per unit of risk. If you would invest 11,900 in Putra Mandiri Jembar on November 30, 2024 and sell it today you would lose (400.00) from holding Putra Mandiri Jembar or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putra Mandiri Jembar vs. Adaro Minerals Indonesia
Performance |
| Timeline |
| Putra Mandiri Jembar |
| Adaro Minerals Indonesia |
Putra Mandiri and Adaro Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putra Mandiri and Adaro Minerals
The main advantage of trading using opposite Putra Mandiri and Adaro Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putra Mandiri position performs unexpectedly, Adaro Minerals 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 Minerals will offset losses from the drop in Adaro Minerals' long position.| Putra Mandiri vs. Uni Charm Indonesia | Putra Mandiri vs. MNC Studios International | Putra Mandiri vs. Kencana Energi Lestari | Putra Mandiri vs. Bintang Oto Global |
| Adaro Minerals vs. Bank Artos Indonesia | Adaro Minerals vs. GoTo Gojek Tokopedia | Adaro Minerals vs. Elang Mahkota Teknologi | Adaro Minerals vs. PT Bukalapak |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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