Correlation Between Bukit Asam and Indo Tambangraya
Can any of the company-specific risk be diversified away by investing in both Bukit Asam and Indo Tambangraya 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 Bukit Asam and Indo Tambangraya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bukit Asam Tbk and Indo Tambangraya Megah, you can compare the effects of market volatilities on Bukit Asam and Indo Tambangraya 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 Bukit Asam with a short position of Indo Tambangraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukit Asam and Indo Tambangraya.
Diversification Opportunities for Bukit Asam and Indo Tambangraya
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bukit and Indo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Asam Tbk and Indo Tambangraya Megah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Tambangraya Megah and Bukit Asam 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 Bukit Asam Tbk are associated (or correlated) with Indo Tambangraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Tambangraya Megah has no effect on the direction of Bukit Asam i.e., Bukit Asam and Indo Tambangraya go up and down completely randomly.
Pair Corralation between Bukit Asam and Indo Tambangraya
Assuming the 90 days trading horizon Bukit Asam Tbk is expected to under-perform the Indo Tambangraya. In addition to that, Bukit Asam is 1.41 times more volatile than Indo Tambangraya Megah. It trades about -0.07 of its total potential returns per unit of risk. Indo Tambangraya Megah is currently generating about 0.29 per unit of volatility. If you would invest 2,545,000 in Indo Tambangraya Megah on August 30, 2024 and sell it today you would earn a total of 197,500 from holding Indo Tambangraya Megah or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bukit Asam Tbk vs. Indo Tambangraya Megah
Performance |
| Timeline |
| Bukit Asam Tbk |
| Indo Tambangraya Megah |
Bukit Asam and Indo Tambangraya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bukit Asam and Indo Tambangraya
The main advantage of trading using opposite Bukit Asam and Indo Tambangraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bukit Asam position performs unexpectedly, Indo Tambangraya 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 Indo Tambangraya will offset losses from the drop in Indo Tambangraya's long position.| Bukit Asam vs. Perusahaan Gas Negara | Bukit Asam vs. Indo Tambangraya Megah | Bukit Asam vs. Aneka Tambang Persero | Bukit Asam vs. Adaro Energy Tbk |
| Indo Tambangraya vs. Bukit Asam Tbk | Indo Tambangraya vs. Adaro Energy Tbk | Indo Tambangraya vs. United Tractors Tbk | Indo Tambangraya vs. Vale Indonesia Tbk |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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