Correlation Between Aneka Tambang and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and ANZ Group 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 ANZ Group 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 ANZ Group Holdings, you can compare the effects of market volatilities on Aneka Tambang and ANZ Group 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 ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and ANZ Group.
Diversification Opportunities for Aneka Tambang and ANZ Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aneka and ANZ is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings 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 ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and ANZ Group go up and down completely randomly.
Pair Corralation between Aneka Tambang and ANZ Group
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 4.55 times more return on investment than ANZ Group. However, Aneka Tambang is 4.55 times more volatile than ANZ Group Holdings. It trades about 0.01 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.05 per unit of risk. If you would invest 83.00 in Aneka Tambang Tbk on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Aneka Tambang Tbk or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. ANZ Group Holdings
Performance |
| Timeline |
| Aneka Tambang Tbk |
| ANZ Group Holdings |
Aneka Tambang and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and ANZ Group
The main advantage of trading using opposite Aneka Tambang and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| Aneka Tambang vs. Hawsons Iron | Aneka Tambang vs. Carlton Investments | Aneka Tambang vs. MFF Capital Investments | Aneka Tambang vs. Mount Gibson Iron |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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