Correlation Between Aneka Tambang and Global Data
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Global Data 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 Global Data 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 Global Data Centre, you can compare the effects of market volatilities on Aneka Tambang and Global Data 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 Global Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Global Data.
Diversification Opportunities for Aneka Tambang and Global Data
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aneka and Global is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Global Data Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Data Centre 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 Global Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Data Centre has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Global Data go up and down completely randomly.
Pair Corralation between Aneka Tambang and Global Data
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.36 times more return on investment than Global Data. However, Aneka Tambang Tbk is 2.75 times less risky than Global Data. It trades about -0.02 of its potential returns per unit of risk. Global Data Centre is currently generating about -0.14 per unit of risk. If you would invest 97.00 in Aneka Tambang Tbk on September 13, 2024 and sell it today you would lose (3.00) from holding Aneka Tambang Tbk or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Global Data Centre
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Global Data Centre |
Aneka Tambang and Global Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Global Data
The main advantage of trading using opposite Aneka Tambang and Global Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Global Data 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 Global Data will offset losses from the drop in Global Data's long position.| Aneka Tambang vs. GreenX Metals | Aneka Tambang vs. Stelar Metals | Aneka Tambang vs. Auctus Alternative Investments | Aneka Tambang vs. Diversified United Investment |
| Global Data vs. Aneka Tambang Tbk | Global Data vs. Commonwealth Bank | Global Data vs. BHP Group Limited | Global Data vs. Rio Tinto |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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