Correlation Between Aneka Tambang and GDI Property
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and GDI Property 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 GDI Property 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 GDI Property Group, you can compare the effects of market volatilities on Aneka Tambang and GDI Property 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 GDI Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and GDI Property.
Diversification Opportunities for Aneka Tambang and GDI Property
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aneka and GDI is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and GDI Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDI Property Group 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 GDI Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDI Property Group has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and GDI Property go up and down completely randomly.
Pair Corralation between Aneka Tambang and GDI Property
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the GDI Property. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 1.62 times less risky than GDI Property. The stock trades about -0.03 of its potential returns per unit of risk. The GDI Property Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 62.00 in GDI Property Group on August 31, 2024 and sell it today you would lose (1.00) from holding GDI Property Group or give up 1.61% 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. GDI Property Group
Performance |
| Timeline |
| Aneka Tambang Tbk |
| GDI Property Group |
Aneka Tambang and GDI Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and GDI Property
The main advantage of trading using opposite Aneka Tambang and GDI Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, GDI Property 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 GDI Property will offset losses from the drop in GDI Property's long position.| Aneka Tambang vs. American West Metals | Aneka Tambang vs. Super Retail Group | Aneka Tambang vs. Computershare | Aneka Tambang vs. Alto Metals |
| GDI Property vs. Scentre Group | GDI Property vs. Charter Hall Retail | GDI Property vs. Ecofibre | GDI Property vs. iShares Global Healthcare |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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