Correlation Between Aneka Tambang and Commonwealth Bank
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Commonwealth Bank 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 Commonwealth Bank 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 Commonwealth Bank of, you can compare the effects of market volatilities on Aneka Tambang and Commonwealth Bank 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 Commonwealth Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Commonwealth Bank.
Diversification Opportunities for Aneka Tambang and Commonwealth Bank
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aneka and Commonwealth is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Commonwealth Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Bank 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 Commonwealth Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Bank has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Commonwealth Bank go up and down completely randomly.
Pair Corralation between Aneka Tambang and Commonwealth Bank
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Commonwealth Bank. In addition to that, Aneka Tambang is 3.2 times more volatile than Commonwealth Bank of. It trades about -0.08 of its total potential returns per unit of risk. Commonwealth Bank of is currently generating about 0.09 per unit of volatility. If you would invest 9,657 in Commonwealth Bank of on August 25, 2024 and sell it today you would earn a total of 881.00 from holding Commonwealth Bank of or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Commonwealth Bank of
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Commonwealth Bank |
Aneka Tambang and Commonwealth Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Commonwealth Bank
The main advantage of trading using opposite Aneka Tambang and Commonwealth Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Commonwealth Bank 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 Commonwealth Bank will offset losses from the drop in Commonwealth Bank's long position.| Aneka Tambang vs. Event Hospitality and | Aneka Tambang vs. Gold Road Resources | Aneka Tambang vs. Treasury Wine Estates | Aneka Tambang vs. Apiam Animal Health |
| Commonwealth Bank vs. BSP Financial Group | Commonwealth Bank vs. Actinogen Medical | Commonwealth Bank vs. Credit Clear | Commonwealth Bank vs. Medical Developments International |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stocks Directory Find actively traded stocks across global markets |