Correlation Between Alfa Energi and Samindo Resources
Can any of the company-specific risk be diversified away by investing in both Alfa Energi and Samindo Resources 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 Alfa Energi and Samindo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Energi Investama and Samindo Resources Tbk, you can compare the effects of market volatilities on Alfa Energi and Samindo Resources 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 Alfa Energi with a short position of Samindo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Energi and Samindo Resources.
Diversification Opportunities for Alfa Energi and Samindo Resources
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alfa and Samindo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Energi Investama and Samindo Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samindo Resources Tbk and Alfa Energi 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 Alfa Energi Investama are associated (or correlated) with Samindo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samindo Resources Tbk has no effect on the direction of Alfa Energi i.e., Alfa Energi and Samindo Resources go up and down completely randomly.
Pair Corralation between Alfa Energi and Samindo Resources
Assuming the 90 days trading horizon Alfa Energi is expected to generate 1.11 times less return on investment than Samindo Resources. In addition to that, Alfa Energi is 1.39 times more volatile than Samindo Resources Tbk. It trades about 0.08 of its total potential returns per unit of risk. Samindo Resources Tbk is currently generating about 0.13 per unit of volatility. If you would invest 198,000 in Samindo Resources Tbk on January 26, 2024 and sell it today you would earn a total of 8,000 from holding Samindo Resources Tbk or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Energi Investama vs. Samindo Resources Tbk
Performance |
| Timeline |
| Alfa Energi Investama |
| Samindo Resources Tbk |
Alfa Energi and Samindo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Energi and Samindo Resources
The main advantage of trading using opposite Alfa Energi and Samindo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Energi position performs unexpectedly, Samindo Resources 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 Samindo Resources will offset losses from the drop in Samindo Resources' long position.| Alfa Energi vs. Adi Sarana Armada | Alfa Energi vs. Elang Mahkota Teknologi | Alfa Energi vs. Erajaya Swasembada Tbk |
| Samindo Resources vs. Adi Sarana Armada | Samindo Resources vs. Elang Mahkota Teknologi | Samindo Resources vs. Erajaya Swasembada 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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