Correlation Between Aneka Tambang and Cikarang Listrindo
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Cikarang Listrindo 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 Cikarang Listrindo 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 Cikarang Listrindo Tbk, you can compare the effects of market volatilities on Aneka Tambang and Cikarang Listrindo 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 Cikarang Listrindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Cikarang Listrindo.
Diversification Opportunities for Aneka Tambang and Cikarang Listrindo
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aneka and Cikarang is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Persero and Cikarang Listrindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cikarang Listrindo 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 Cikarang Listrindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cikarang Listrindo Tbk has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Cikarang Listrindo go up and down completely randomly.
Pair Corralation between Aneka Tambang and Cikarang Listrindo
Assuming the 90 days trading horizon Aneka Tambang Persero is expected to under-perform the Cikarang Listrindo. In addition to that, Aneka Tambang is 4.14 times more volatile than Cikarang Listrindo Tbk. It trades about -0.15 of its total potential returns per unit of risk. Cikarang Listrindo Tbk is currently generating about -0.04 per unit of volatility. If you would invest 70,500 in Cikarang Listrindo Tbk on August 29, 2024 and sell it today you would lose (500.00) from holding Cikarang Listrindo Tbk or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Persero vs. Cikarang Listrindo Tbk
Performance |
| Timeline |
| Aneka Tambang Persero |
| Cikarang Listrindo Tbk |
Aneka Tambang and Cikarang Listrindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Cikarang Listrindo
The main advantage of trading using opposite Aneka Tambang and Cikarang Listrindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Cikarang Listrindo 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 Cikarang Listrindo will offset losses from the drop in Cikarang Listrindo'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 |
| Cikarang Listrindo vs. Aneka Tambang Persero | Cikarang Listrindo vs. Bukit Asam Tbk | Cikarang Listrindo vs. Telkom Indonesia Tbk | Cikarang Listrindo 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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