Correlation Between Aneka Tambang and Petrosea Tbk
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Petrosea Tbk 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 Petrosea Tbk 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 Petrosea Tbk, you can compare the effects of market volatilities on Aneka Tambang and Petrosea Tbk 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 Petrosea Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Petrosea Tbk.
Diversification Opportunities for Aneka Tambang and Petrosea Tbk
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aneka and Petrosea is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Persero and Petrosea Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrosea 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 Petrosea Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrosea Tbk has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Petrosea Tbk go up and down completely randomly.
Pair Corralation between Aneka Tambang and Petrosea Tbk
Assuming the 90 days trading horizon Aneka Tambang Persero is expected to under-perform the Petrosea Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Persero is 1.08 times less risky than Petrosea Tbk. The stock trades about -0.15 of its potential returns per unit of risk. The Petrosea Tbk is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,630,000 in Petrosea Tbk on August 29, 2024 and sell it today you would earn a total of 235,000 from holding Petrosea Tbk or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Persero vs. Petrosea Tbk
Performance |
| Timeline |
| Aneka Tambang Persero |
| Petrosea Tbk |
Aneka Tambang and Petrosea Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Petrosea Tbk
The main advantage of trading using opposite Aneka Tambang and Petrosea Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Petrosea Tbk 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 Petrosea Tbk will offset losses from the drop in Petrosea Tbk'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 |
| Petrosea Tbk vs. Indika Energy Tbk | Petrosea Tbk vs. Harum Energy Tbk | Petrosea Tbk vs. Indo Tambangraya Megah | Petrosea Tbk vs. Gajah Tunggal 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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