Correlation Between Aneka Tambang and BHP Group
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and BHP 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 BHP 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 BHP Group Limited, you can compare the effects of market volatilities on Aneka Tambang and BHP 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 BHP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and BHP Group.
Diversification Opportunities for Aneka Tambang and BHP Group
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aneka and BHP is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and BHP Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BHP Group Limited 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 BHP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BHP Group Limited has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and BHP Group go up and down completely randomly.
Pair Corralation between Aneka Tambang and BHP Group
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.99 times more return on investment than BHP Group. However, Aneka Tambang Tbk is 1.01 times less risky than BHP Group. It trades about 0.01 of its potential returns per unit of risk. BHP Group Limited is currently generating about 0.0 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 | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. BHP Group Limited
Performance |
| Timeline |
| Aneka Tambang Tbk |
| BHP Group Limited |
Aneka Tambang and BHP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and BHP Group
The main advantage of trading using opposite Aneka Tambang and BHP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, BHP 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 BHP Group will offset losses from the drop in BHP 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 |
| BHP Group vs. Clime Investment Management | BHP Group vs. Mach7 Technologies | BHP Group vs. Air New Zealand | BHP Group vs. K2 Asset Management |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |