Correlation Between Natural Resource and Indo Tambangraya
Can any of the company-specific risk be diversified away by investing in both Natural Resource and Indo Tambangraya 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 Natural Resource and Indo Tambangraya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Resource Partners and Indo Tambangraya Megah, you can compare the effects of market volatilities on Natural Resource and Indo Tambangraya 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 Natural Resource with a short position of Indo Tambangraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Resource and Indo Tambangraya.
Diversification Opportunities for Natural Resource and Indo Tambangraya
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Natural and Indo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Natural Resource Partners and Indo Tambangraya Megah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Tambangraya Megah and Natural Resource 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 Natural Resource Partners are associated (or correlated) with Indo Tambangraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Tambangraya Megah has no effect on the direction of Natural Resource i.e., Natural Resource and Indo Tambangraya go up and down completely randomly.
Pair Corralation between Natural Resource and Indo Tambangraya
Considering the 90-day investment horizon Natural Resource Partners is expected to generate 0.63 times more return on investment than Indo Tambangraya. However, Natural Resource Partners is 1.59 times less risky than Indo Tambangraya. It trades about 0.19 of its potential returns per unit of risk. Indo Tambangraya Megah is currently generating about -0.06 per unit of risk. If you would invest 8,774 in Natural Resource Partners on September 13, 2024 and sell it today you would earn a total of 1,980 from holding Natural Resource Partners or generate 22.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Natural Resource Partners vs. Indo Tambangraya Megah
Performance |
Timeline |
Natural Resource Partners |
Indo Tambangraya Megah |
Natural Resource and Indo Tambangraya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Natural Resource and Indo Tambangraya
The main advantage of trading using opposite Natural Resource and Indo Tambangraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Resource position performs unexpectedly, Indo Tambangraya 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 Indo Tambangraya will offset losses from the drop in Indo Tambangraya's long position.Natural Resource vs. Hallador Energy | Natural Resource vs. Consol Energy | Natural Resource vs. Adaro Energy Tbk | Natural Resource vs. Alliance Resource Partners |
Indo Tambangraya vs. Bukit Asam Tbk | Indo Tambangraya vs. Adaro Energy Tbk | Indo Tambangraya vs. Geo Energy Resources | Indo Tambangraya vs. Yanzhou Coal Mining |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Stocks Directory Find actively traded stocks across global markets | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |