Correlation Between AiMedia Technologies and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both AiMedia Technologies and Aneka Tambang 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 AiMedia Technologies and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AiMedia Technologies and Aneka Tambang Tbk, you can compare the effects of market volatilities on AiMedia Technologies and Aneka Tambang 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 AiMedia Technologies with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of AiMedia Technologies and Aneka Tambang.
Diversification Opportunities for AiMedia Technologies and Aneka Tambang
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AiMedia and Aneka is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding AiMedia Technologies and Aneka Tambang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aneka Tambang Tbk and AiMedia Technologies 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 AiMedia Technologies are associated (or correlated) with Aneka Tambang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aneka Tambang Tbk has no effect on the direction of AiMedia Technologies i.e., AiMedia Technologies and Aneka Tambang go up and down completely randomly.
Pair Corralation between AiMedia Technologies and Aneka Tambang
Assuming the 90 days trading horizon AiMedia Technologies is expected to generate 3.61 times more return on investment than Aneka Tambang. However, AiMedia Technologies is 3.61 times more volatile than Aneka Tambang Tbk. It trades about 0.07 of its potential returns per unit of risk. Aneka Tambang Tbk is currently generating about -0.01 per unit of risk. If you would invest 34.00 in AiMedia Technologies on October 13, 2024 and sell it today you would earn a total of 50.00 from holding AiMedia Technologies or generate 147.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
AiMedia Technologies vs. Aneka Tambang Tbk
Performance |
Timeline |
AiMedia Technologies |
Aneka Tambang Tbk |
AiMedia Technologies and Aneka Tambang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AiMedia Technologies and Aneka Tambang
The main advantage of trading using opposite AiMedia Technologies and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AiMedia Technologies position performs unexpectedly, Aneka Tambang 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 Aneka Tambang will offset losses from the drop in Aneka Tambang's long position.AiMedia Technologies vs. Regal Funds Management | AiMedia Technologies vs. Platinum Asset Management | AiMedia Technologies vs. Health and Plant | AiMedia Technologies vs. Ramsay Health Care |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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