Correlation Between Aneka Tambang and Embark Education
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Embark Education 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 Embark Education 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 Embark Education Group, you can compare the effects of market volatilities on Aneka Tambang and Embark Education 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 Embark Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Embark Education.
Diversification Opportunities for Aneka Tambang and Embark Education
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aneka and Embark is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Embark Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Education 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 Embark Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Education has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Embark Education go up and down completely randomly.
Pair Corralation between Aneka Tambang and Embark Education
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Embark Education. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 1.9 times less risky than Embark Education. The stock trades about -0.05 of its potential returns per unit of risk. The Embark Education Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 51.00 in Embark Education Group on August 28, 2024 and sell it today you would earn a total of 29.00 from holding Embark Education Group or generate 56.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Embark Education Group
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Embark Education |
Aneka Tambang and Embark Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Embark Education
The main advantage of trading using opposite Aneka Tambang and Embark Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Embark Education 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 Embark Education will offset losses from the drop in Embark Education'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 |
| Embark Education vs. Macquarie Technology Group | Embark Education vs. Richmond Vanadium Technology | Embark Education vs. Cleanaway Waste Management | Embark Education vs. Microequities Asset Management |
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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