Correlation Between Alternative Investment and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Alternative Investment 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 Alternative Investment and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Investment Trust and Aneka Tambang Tbk, you can compare the effects of market volatilities on Alternative Investment 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 Alternative Investment with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Investment and Aneka Tambang.
Diversification Opportunities for Alternative Investment and Aneka Tambang
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alternative and Aneka is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment Trust 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 Alternative Investment 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 Alternative Investment Trust 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 Alternative Investment i.e., Alternative Investment and Aneka Tambang go up and down completely randomly.
Pair Corralation between Alternative Investment and Aneka Tambang
If you would invest 145.00 in Alternative Investment Trust on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Alternative Investment Trust or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alternative Investment Trust vs. Aneka Tambang Tbk
Performance |
| Timeline |
| Alternative Investment |
| Aneka Tambang Tbk |
Alternative Investment and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Investment and Aneka Tambang
The main advantage of trading using opposite Alternative Investment and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Investment 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.| Alternative Investment vs. National Australia Bank | Alternative Investment vs. National Australia Bank | Alternative Investment vs. Westpac Banking | Alternative Investment vs. National Australia Bank |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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