Correlation Between Aneka Tambang and Aeon Metals
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Aeon Metals 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 Aeon Metals 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 Aeon Metals, you can compare the effects of market volatilities on Aneka Tambang and Aeon Metals 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 Aeon Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Aeon Metals.
Diversification Opportunities for Aneka Tambang and Aeon Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aneka and Aeon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Aeon Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Metals 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 Aeon Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Metals has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Aeon Metals go up and down completely randomly.
Pair Corralation between Aneka Tambang and Aeon Metals
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Aeon Metals. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 7.28 times less risky than Aeon Metals. The stock trades about -0.03 of its potential returns per unit of risk. The Aeon Metals is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1.80 in Aeon Metals on September 4, 2024 and sell it today you would lose (1.30) from holding Aeon Metals or give up 72.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Aeon Metals
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Aeon Metals |
Aneka Tambang and Aeon Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Aeon Metals
The main advantage of trading using opposite Aneka Tambang and Aeon Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Aeon Metals 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 Aeon Metals will offset losses from the drop in Aeon Metals' long position.| Aneka Tambang vs. Ora Banda Mining | Aneka Tambang vs. Evolution Mining | Aneka Tambang vs. Queste Communications | Aneka Tambang vs. Metro Mining |
| Aeon Metals vs. Northern Star Resources | Aeon Metals vs. Evolution Mining | Aeon Metals vs. Bluescope Steel | Aeon Metals vs. Sandfire Resources NL |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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