Correlation Between Alfa Energi and Borneo Olah

Can any of the company-specific risk be diversified away by investing in both Alfa Energi and Borneo Olah 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 Borneo Olah 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 Borneo Olah Sarana, you can compare the effects of market volatilities on Alfa Energi and Borneo Olah 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 Borneo Olah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Energi and Borneo Olah.

Diversification Opportunities for Alfa Energi and Borneo Olah

0.0

Correlation Coefficient

Alfa Energi  Borneo Olah

Pay attention - limited upside

The 3 months correlation between Alfa and Borneo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Energi Investama and Borneo Olah Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borneo Olah Sarana 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 Borneo Olah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borneo Olah Sarana has no effect on the direction of Alfa Energi i.e., Alfa Energi and Borneo Olah go up and down completely randomly.

Pair Corralation between Alfa Energi and Borneo Olah

If you would invest  5,000  in Borneo Olah Sarana on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Borneo Olah Sarana or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alfa Energi Investama  vs.  Borneo Olah Sarana

Alfa Energi Investama

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Alfa Energi Investama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Borneo Olah Sarana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Borneo Olah Sarana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Borneo Olah is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Alfa Energi and Borneo Olah

The main advantage of trading using opposite Alfa Energi and Borneo Olah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Energi position performs unexpectedly, Borneo Olah 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 Borneo Olah will offset losses from the drop in Borneo Olah's long position.

The idea behind Alfa Energi Investama and Borneo Olah Sarana pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.