Correlation Between Aneka Tambang and Centrex Metals
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Centrex 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 Centrex 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 Centrex Metals, you can compare the effects of market volatilities on Aneka Tambang and Centrex 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 Centrex Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Centrex Metals.
Diversification Opportunities for Aneka Tambang and Centrex Metals
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aneka and Centrex is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Centrex Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrex 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 Centrex Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrex Metals has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Centrex Metals go up and down completely randomly.
Pair Corralation between Aneka Tambang and Centrex Metals
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.25 times more return on investment than Centrex Metals. However, Aneka Tambang Tbk is 4.08 times less risky than Centrex Metals. It trades about 0.32 of its potential returns per unit of risk. Centrex Metals is currently generating about -0.33 per unit of risk. If you would invest 86.00 in Aneka Tambang Tbk on September 28, 2024 and sell it today you would earn a total of 8.00 from holding Aneka Tambang Tbk or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Centrex Metals
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Centrex Metals |
Aneka Tambang and Centrex Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Centrex Metals
The main advantage of trading using opposite Aneka Tambang and Centrex Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Centrex 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 Centrex Metals will offset losses from the drop in Centrex Metals' long position.| Aneka Tambang vs. COAST ENTERTAINMENT HOLDINGS | Aneka Tambang vs. Sports Entertainment Group | Aneka Tambang vs. MFF Capital Investments | Aneka Tambang vs. A1 Investments Resources |
| Centrex Metals vs. Northern Star Resources | Centrex Metals vs. Evolution Mining | Centrex Metals vs. Bluescope Steel | Centrex Metals vs. Aneka Tambang Tbk |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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