Correlation Between Aneka Gas and Indal Aluminium
Can any of the company-specific risk be diversified away by investing in both Aneka Gas 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 Aneka Gas and Indal Aluminium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aneka Gas Industri and Indal Aluminium Industry, you can compare the effects of market volatilities on Aneka Gas 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 Aneka Gas with a short position of Indal Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Gas and Indal Aluminium.
Diversification Opportunities for Aneka Gas and Indal Aluminium
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aneka and Indal is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Gas Industri 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 Aneka Gas 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 Aneka Gas Industri 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 Aneka Gas i.e., Aneka Gas and Indal Aluminium go up and down completely randomly.
Pair Corralation between Aneka Gas and Indal Aluminium
Assuming the 90 days trading horizon Aneka Gas Industri is expected to generate 0.61 times more return on investment than Indal Aluminium. However, Aneka Gas Industri is 1.65 times less risky than Indal Aluminium. It trades about -0.2 of its potential returns per unit of risk. Indal Aluminium Industry is currently generating about -0.26 per unit of risk. If you would invest 166,500 in Aneka Gas Industri on October 26, 2024 and sell it today you would lose (25,500) from holding Aneka Gas Industri or give up 15.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Gas Industri vs. Indal Aluminium Industry
Performance |
| Timeline |
| Aneka Gas Industri |
| Indal Aluminium Industry |
Aneka Gas and Indal Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Gas and Indal Aluminium
The main advantage of trading using opposite Aneka Gas and Indal Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Gas 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.| Aneka Gas vs. Surya Esa Perkasa | Aneka Gas vs. Elang Mahkota Teknologi | Aneka Gas vs. Merdeka Copper Gold | Aneka Gas vs. Saratoga Investama Sedaya |
| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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