Correlation Between RMK Energy and Adaro Minerals
Can any of the company-specific risk be diversified away by investing in both RMK Energy 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 RMK Energy and Adaro Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RMK Energy PT and Adaro Minerals Indonesia, you can compare the effects of market volatilities on RMK Energy 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 RMK Energy with a short position of Adaro Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMK Energy and Adaro Minerals.
Diversification Opportunities for RMK Energy and Adaro Minerals
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between RMK and Adaro is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding RMK Energy PT 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 RMK Energy 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 RMK Energy PT 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 RMK Energy i.e., RMK Energy and Adaro Minerals go up and down completely randomly.
Pair Corralation between RMK Energy and Adaro Minerals
Assuming the 90 days trading horizon RMK Energy PT is expected to under-perform the Adaro Minerals. But the stock apears to be less risky and, when comparing its historical volatility, RMK Energy PT is 1.2 times less risky than Adaro Minerals. The stock trades about -0.04 of its potential returns per unit of risk. The Adaro Minerals Indonesia is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 168,000 in Adaro Minerals Indonesia on August 29, 2024 and sell it today you would lose (40,000) from holding Adaro Minerals Indonesia or give up 23.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
RMK Energy PT vs. Adaro Minerals Indonesia
Performance |
| Timeline |
| RMK Energy PT |
| Adaro Minerals Indonesia |
RMK Energy and Adaro Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMK Energy and Adaro Minerals
The main advantage of trading using opposite RMK Energy and Adaro Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMK Energy 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.| RMK Energy vs. Adaro Minerals Indonesia | RMK Energy vs. Prima Andalan Mandiri | RMK Energy vs. Sumber Global Energy | RMK Energy vs. Golden Eagle Energy |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |