Correlation Between Super Energy and Indal Aluminium
Can any of the company-specific risk be diversified away by investing in both Super Energy and Indal Aluminium 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 Super Energy and Indal Aluminium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super Energy Tbk and Indal Aluminium Industry, you can compare the effects of market volatilities on Super Energy and Indal Aluminium 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 Super Energy with a short position of Indal Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Energy and Indal Aluminium.
Diversification Opportunities for Super Energy and Indal Aluminium
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Super and Indal is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Super Energy Tbk and Indal Aluminium Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indal Aluminium Industry and Super 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 Super Energy Tbk are associated (or correlated) with Indal Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indal Aluminium Industry has no effect on the direction of Super Energy i.e., Super Energy and Indal Aluminium go up and down completely randomly.
Pair Corralation between Super Energy and Indal Aluminium
Assuming the 90 days trading horizon Super Energy Tbk is expected to generate 0.97 times more return on investment than Indal Aluminium. However, Super Energy Tbk is 1.04 times less risky than Indal Aluminium. It trades about 0.05 of its potential returns per unit of risk. Indal Aluminium Industry is currently generating about -0.06 per unit of risk. If you would invest 171,500 in Super Energy Tbk on November 5, 2024 and sell it today you would earn a total of 98,500 from holding Super Energy Tbk or generate 57.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Energy Tbk vs. Indal Aluminium Industry
Performance |
| Timeline |
| Super Energy Tbk |
| Indal Aluminium Industry |
Super Energy and Indal Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Energy and Indal Aluminium
The main advantage of trading using opposite Super Energy and Indal Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Energy position performs unexpectedly, Indal Aluminium 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 Indal Aluminium will offset losses from the drop in Indal Aluminium's long position.| Super Energy vs. Transcoal Pacific Tbk | Super Energy vs. Sillo Maritime Perdana | Super Energy vs. Pollux Properti Indonesia | Super Energy vs. Mahkota Group Tbk |
| Indal Aluminium vs. Intanwijaya Internasional Tbk | Indal Aluminium vs. Alumindo Light Metal | Indal Aluminium vs. Champion Pacific Indonesia | Indal Aluminium vs. Betonjaya Manunggal 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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