Correlation Between Aneka Tambang and Austral Gold
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Austral Gold 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 Austral Gold 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 Austral Gold, you can compare the effects of market volatilities on Aneka Tambang and Austral Gold 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 Austral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Austral Gold.
Diversification Opportunities for Aneka Tambang and Austral Gold
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aneka and Austral is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Austral Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austral Gold 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 Austral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austral Gold has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Austral Gold go up and down completely randomly.
Pair Corralation between Aneka Tambang and Austral Gold
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.3 times more return on investment than Austral Gold. However, Aneka Tambang Tbk is 3.36 times less risky than Austral Gold. It trades about -0.1 of its potential returns per unit of risk. Austral Gold is currently generating about -0.04 per unit of risk. If you would invest 91.00 in Aneka Tambang Tbk on August 29, 2024 and sell it today you would lose (5.00) from holding Aneka Tambang Tbk or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Austral Gold
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Austral Gold |
Aneka Tambang and Austral Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Austral Gold
The main advantage of trading using opposite Aneka Tambang and Austral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Austral Gold 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 Austral Gold will offset losses from the drop in Austral Gold's long position.| Aneka Tambang vs. Actinogen Medical | Aneka Tambang vs. TTG Fintech | Aneka Tambang vs. IDP Education | Aneka Tambang vs. G8 Education |
| Austral Gold vs. Aurelia Metals | Austral Gold vs. Stelar Metals | Austral Gold vs. Air New Zealand | Austral Gold vs. Hotel Property Investments |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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