Correlation Between Aneka Tambang and Adacel Tech
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Adacel Tech 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 Adacel Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aneka Tambang Tbk and Adacel Tech, you can compare the effects of market volatilities on Aneka Tambang and Adacel Tech 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 Adacel Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Adacel Tech.
Diversification Opportunities for Aneka Tambang and Adacel Tech
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aneka and Adacel is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Adacel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adacel Tech 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 Tbk are associated (or correlated) with Adacel Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adacel Tech has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Adacel Tech go up and down completely randomly.
Pair Corralation between Aneka Tambang and Adacel Tech
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.36 times more return on investment than Adacel Tech. However, Aneka Tambang Tbk is 2.76 times less risky than Adacel Tech. It trades about -0.07 of its potential returns per unit of risk. Adacel Tech is currently generating about -0.05 per unit of risk. If you would invest 107.00 in Aneka Tambang Tbk on September 5, 2024 and sell it today you would lose (17.00) from holding Aneka Tambang Tbk or give up 15.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Adacel Tech
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Adacel Tech |
Aneka Tambang and Adacel Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Adacel Tech
The main advantage of trading using opposite Aneka Tambang and Adacel Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Adacel Tech 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 Adacel Tech will offset losses from the drop in Adacel Tech's long position.| Aneka Tambang vs. Home Consortium | Aneka Tambang vs. Singular Health Group | Aneka Tambang vs. Oneview Healthcare PLC | Aneka Tambang vs. Regis Healthcare |
| Adacel Tech vs. Aneka Tambang Tbk | Adacel Tech vs. BHP Group Limited | Adacel Tech vs. Commonwealth Bank of | Adacel Tech vs. Commonwealth Bank of |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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