Correlation Between Terregra Asia and Alfa Energi
Can any of the company-specific risk be diversified away by investing in both Terregra Asia and Alfa Energi 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 Terregra Asia and Alfa Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terregra Asia Energy and Alfa Energi Investama, you can compare the effects of market volatilities on Terregra Asia and Alfa Energi 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 Terregra Asia with a short position of Alfa Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terregra Asia and Alfa Energi.
Diversification Opportunities for Terregra Asia and Alfa Energi
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Terregra and Alfa is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Terregra Asia Energy and Alfa Energi Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Energi Investama and Terregra Asia 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 Terregra Asia Energy are associated (or correlated) with Alfa Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Energi Investama has no effect on the direction of Terregra Asia i.e., Terregra Asia and Alfa Energi go up and down completely randomly.
Pair Corralation between Terregra Asia and Alfa Energi
Assuming the 90 days trading horizon Terregra Asia is expected to generate 4.73 times less return on investment than Alfa Energi. But when comparing it to its historical volatility, Terregra Asia Energy is 1.38 times less risky than Alfa Energi. It trades about 0.01 of its potential returns per unit of risk. Alfa Energi Investama is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,300 in Alfa Energi Investama on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Alfa Energi Investama or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terregra Asia Energy vs. Alfa Energi Investama
Performance |
| Timeline |
| Terregra Asia Energy |
| Alfa Energi Investama |
Terregra Asia and Alfa Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terregra Asia and Alfa Energi
The main advantage of trading using opposite Terregra Asia and Alfa Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terregra Asia position performs unexpectedly, Alfa Energi 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 Alfa Energi will offset losses from the drop in Alfa Energi's long position.| Terregra Asia vs. Kapuas Prima Coal | Terregra Asia vs. Cikarang Listrindo Tbk | Terregra Asia vs. PP Presisi Tbk | Terregra Asia vs. Alfa Energi Investama |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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