Correlation Between Aneka Tambang and Emetals
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Emetals 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 Emetals 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 Emetals, you can compare the effects of market volatilities on Aneka Tambang and Emetals 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 Emetals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Emetals.
Diversification Opportunities for Aneka Tambang and Emetals
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aneka and Emetals is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Emetals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emetals 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 Emetals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emetals has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Emetals go up and down completely randomly.
Pair Corralation between Aneka Tambang and Emetals
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.1 times more return on investment than Emetals. However, Aneka Tambang Tbk is 10.35 times less risky than Emetals. It trades about 0.31 of its potential returns per unit of risk. Emetals is currently generating about -0.13 per unit of risk. If you would invest 95.00 in Aneka Tambang Tbk on December 10, 2024 and sell it today you would earn a total of 5.00 from holding Aneka Tambang Tbk or generate 5.26% 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. Emetals
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Emetals |
Aneka Tambang and Emetals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Emetals
The main advantage of trading using opposite Aneka Tambang and Emetals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Emetals 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 Emetals will offset losses from the drop in Emetals' long position.| Aneka Tambang vs. Centaurus Metals | Aneka Tambang vs. Charter Hall Education | Aneka Tambang vs. Macquarie Technology Group | Aneka Tambang vs. G8 Education |
| Emetals vs. Northern Star Resources | Emetals vs. Alcoa Inc | Emetals vs. Evolution Mining | Emetals vs. Bluescope Steel |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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