Correlation Between Aneka Gas and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Aneka Gas and Timah Persero 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 Timah Persero 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 Timah Persero Tbk, you can compare the effects of market volatilities on Aneka Gas and Timah Persero 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 Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Gas and Timah Persero.
Diversification Opportunities for Aneka Gas and Timah Persero
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aneka and Timah is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Gas Industri and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero Tbk 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 Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Aneka Gas i.e., Aneka Gas and Timah Persero go up and down completely randomly.
Pair Corralation between Aneka Gas and Timah Persero
Assuming the 90 days trading horizon Aneka Gas Industri is expected to under-perform the Timah Persero. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Gas Industri is 2.53 times less risky than Timah Persero. The stock trades about -0.1 of its potential returns per unit of risk. The Timah Persero Tbk is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 94,000 in Timah Persero Tbk on January 19, 2025 and sell it today you would earn a total of 7,000 from holding Timah Persero Tbk or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Gas Industri vs. Timah Persero Tbk
Performance |
| Timeline |
| Aneka Gas Industri |
| Timah Persero Tbk |
Aneka Gas and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Gas and Timah Persero
The main advantage of trading using opposite Aneka Gas and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Gas position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero'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 |
| Timah Persero vs. Betonjaya Manunggal Tbk | Timah Persero vs. Lotte Chemical Titan | Timah Persero vs. Saranacentral Bajatama Tbk | Timah Persero vs. Pelat Timah Nusantara |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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