Correlation Between Aneka Tambang and Home Consortium
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Home Consortium 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 Home Consortium 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 Home Consortium, you can compare the effects of market volatilities on Aneka Tambang and Home Consortium 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 Home Consortium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Home Consortium.
Diversification Opportunities for Aneka Tambang and Home Consortium
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aneka and Home is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Home Consortium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Consortium 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 Home Consortium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Consortium has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Home Consortium go up and down completely randomly.
Pair Corralation between Aneka Tambang and Home Consortium
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Home Consortium. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 1.27 times less risky than Home Consortium. The stock trades about -0.1 of its potential returns per unit of risk. The Home Consortium is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 921.00 in Home Consortium on August 25, 2024 and sell it today you would earn a total of 283.00 from holding Home Consortium or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Home Consortium
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Home Consortium |
Aneka Tambang and Home Consortium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Home Consortium
The main advantage of trading using opposite Aneka Tambang and Home Consortium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Home Consortium 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 Home Consortium will offset losses from the drop in Home Consortium's long position.| Aneka Tambang vs. Event Hospitality and | Aneka Tambang vs. Gold Road Resources | Aneka Tambang vs. Treasury Wine Estates | Aneka Tambang vs. Apiam Animal Health |
| Home Consortium vs. Scentre Group | Home Consortium vs. Vicinity Centres Re | Home Consortium vs. Charter Hall Retail | Home Consortium vs. Cromwell Property Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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