Correlation Between Aneka Tambang and Eagle Mountain
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Eagle Mountain 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 Eagle Mountain 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 Eagle Mountain Mining, you can compare the effects of market volatilities on Aneka Tambang and Eagle Mountain 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 Eagle Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Eagle Mountain.
Diversification Opportunities for Aneka Tambang and Eagle Mountain
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aneka and Eagle is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Eagle Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mountain Mining 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 Eagle Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mountain Mining has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Eagle Mountain go up and down completely randomly.
Pair Corralation between Aneka Tambang and Eagle Mountain
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.19 times more return on investment than Eagle Mountain. However, Aneka Tambang Tbk is 5.18 times less risky than Eagle Mountain. It trades about -0.05 of its potential returns per unit of risk. Eagle Mountain Mining is currently generating about -0.06 per unit of risk. If you would invest 105.00 in Aneka Tambang Tbk on August 28, 2024 and sell it today you would lose (19.00) from holding Aneka Tambang Tbk or give up 18.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Eagle Mountain Mining
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Eagle Mountain Mining |
Aneka Tambang and Eagle Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Eagle Mountain
The main advantage of trading using opposite Aneka Tambang and Eagle Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Eagle Mountain 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 Eagle Mountain will offset losses from the drop in Eagle Mountain'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 |
| Eagle Mountain vs. Northern Star Resources | Eagle Mountain vs. Evolution Mining | Eagle Mountain vs. Bluescope Steel | Eagle Mountain vs. Sandfire Resources NL |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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