Correlation Between Aneka Tambang and Duxton Broadacre
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Duxton Broadacre 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 Duxton Broadacre 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 Duxton Broadacre Farms, you can compare the effects of market volatilities on Aneka Tambang and Duxton Broadacre 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 Duxton Broadacre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Duxton Broadacre.
Diversification Opportunities for Aneka Tambang and Duxton Broadacre
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aneka and Duxton is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Duxton Broadacre Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duxton Broadacre Farms 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 Duxton Broadacre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duxton Broadacre Farms has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Duxton Broadacre go up and down completely randomly.
Pair Corralation between Aneka Tambang and Duxton Broadacre
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Duxton Broadacre. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 1.08 times less risky than Duxton Broadacre. The stock trades about -0.1 of its potential returns per unit of risk. The Duxton Broadacre Farms is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Duxton Broadacre Farms on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Duxton Broadacre Farms or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Duxton Broadacre Farms
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Duxton Broadacre Farms |
Aneka Tambang and Duxton Broadacre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Duxton Broadacre
The main advantage of trading using opposite Aneka Tambang and Duxton Broadacre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Duxton Broadacre 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 Duxton Broadacre will offset losses from the drop in Duxton Broadacre'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 |
| Duxton Broadacre vs. Aneka Tambang Tbk | Duxton Broadacre vs. Commonwealth Bank | Duxton Broadacre vs. Commonwealth Bank of | Duxton Broadacre vs. Australia and New |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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