Correlation Between PT Aneka and Apple
Can any of the company-specific risk be diversified away by investing in both PT Aneka and Apple 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 PT Aneka and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Aneka Tambang and Apple Inc, you can compare the effects of market volatilities on PT Aneka and Apple 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 PT Aneka with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Aneka and Apple.
Diversification Opportunities for PT Aneka and Apple
Very weak diversification
The 3 months correlation between AKTA and Apple is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PT Aneka Tambang and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and PT Aneka 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 PT Aneka Tambang are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of PT Aneka i.e., PT Aneka and Apple go up and down completely randomly.
Pair Corralation between PT Aneka and Apple
Assuming the 90 days trading horizon PT Aneka Tambang is expected to generate 13.39 times more return on investment than Apple. However, PT Aneka is 13.39 times more volatile than Apple Inc. It trades about 0.04 of its potential returns per unit of risk. Apple Inc is currently generating about 0.39 per unit of risk. If you would invest 7.80 in PT Aneka Tambang on September 2, 2024 and sell it today you would lose (0.75) from holding PT Aneka Tambang or give up 9.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Aneka Tambang vs. Apple Inc
Performance |
| Timeline |
| PT Aneka Tambang |
| Apple Inc |
PT Aneka and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Aneka and Apple
The main advantage of trading using opposite PT Aneka and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Aneka position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.The idea behind PT Aneka Tambang and Apple Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Apple vs. Strategic Investments AS | Apple vs. Gladstone Investment | Apple vs. SEI INVESTMENTS | Apple vs. EAT WELL INVESTMENT |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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