Correlation Between Aneka Tambang and Leyand International
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Leyand International 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 Tambang and Leyand International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aneka Tambang Persero and Leyand International Tbk, you can compare the effects of market volatilities on Aneka Tambang and Leyand International 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 Tambang with a short position of Leyand International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Leyand International.
Diversification Opportunities for Aneka Tambang and Leyand International
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aneka and Leyand is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Persero and Leyand International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyand International Tbk and Aneka Tambang 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 Tambang Persero are associated (or correlated) with Leyand International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyand International Tbk has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Leyand International go up and down completely randomly.
Pair Corralation between Aneka Tambang and Leyand International
Assuming the 90 days trading horizon Aneka Tambang Persero is expected to generate 0.98 times more return on investment than Leyand International. However, Aneka Tambang Persero is 1.02 times less risky than Leyand International. It trades about -0.17 of its potential returns per unit of risk. Leyand International Tbk is currently generating about -0.39 per unit of risk. If you would invest 160,000 in Aneka Tambang Persero on September 1, 2024 and sell it today you would lose (16,500) from holding Aneka Tambang Persero or give up 10.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aneka Tambang Persero vs. Leyand International Tbk
Performance |
| Timeline |
| Aneka Tambang Persero |
| Leyand International Tbk |
Aneka Tambang and Leyand International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Leyand International
The main advantage of trading using opposite Aneka Tambang and Leyand International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Leyand International 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 Leyand International will offset losses from the drop in Leyand International's long position.| Aneka Tambang vs. Perusahaan Gas Negara | Aneka Tambang vs. Vale Indonesia Tbk | Aneka Tambang vs. Bukit Asam Tbk | Aneka Tambang vs. Telkom Indonesia Tbk |
| Leyand International vs. Aneka Tambang Persero | Leyand International vs. Bukit Asam Tbk | Leyand International vs. Telkom Indonesia Tbk | Leyand International vs. Astra International 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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