Correlation Between Aneka Tambang and Dug Technology
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Dug Technology 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 Dug Technology 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 Dug Technology, you can compare the effects of market volatilities on Aneka Tambang and Dug Technology 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 Dug Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Dug Technology.
Diversification Opportunities for Aneka Tambang and Dug Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aneka and Dug is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Dug Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dug Technology 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 Dug Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dug Technology has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Dug Technology go up and down completely randomly.
Pair Corralation between Aneka Tambang and Dug Technology
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.85 times more return on investment than Dug Technology. However, Aneka Tambang Tbk is 1.18 times less risky than Dug Technology. It trades about -0.1 of its potential returns per unit of risk. Dug Technology is currently generating about -0.39 per unit of risk. If you would invest 91.00 in Aneka Tambang Tbk on August 28, 2024 and sell it today you would lose (5.00) from holding Aneka Tambang Tbk or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Dug Technology
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Dug Technology |
Aneka Tambang and Dug Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Dug Technology
The main advantage of trading using opposite Aneka Tambang and Dug Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Dug Technology 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 Dug Technology will offset losses from the drop in Dug Technology'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 |
| Dug Technology vs. Vulcan Steel | Dug Technology vs. Queste Communications | Dug Technology vs. Aristocrat Leisure | Dug Technology vs. Viva Leisure |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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