Correlation Between Aneka Tambang and Insignia Financial
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Insignia Financial 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 Insignia Financial 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 Insignia Financial, you can compare the effects of market volatilities on Aneka Tambang and Insignia Financial 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 Insignia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Insignia Financial.
Diversification Opportunities for Aneka Tambang and Insignia Financial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aneka and Insignia is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Insignia Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insignia Financial 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 Insignia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insignia Financial has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Insignia Financial go up and down completely randomly.
Pair Corralation between Aneka Tambang and Insignia Financial
Assuming the 90 days trading horizon Aneka Tambang is expected to generate 1841.0 times less return on investment than Insignia Financial. But when comparing it to its historical volatility, Aneka Tambang Tbk is 10.11 times less risky than Insignia Financial. It trades about 0.0 of its potential returns per unit of risk. Insignia Financial is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 352.00 in Insignia Financial on November 3, 2024 and sell it today you would earn a total of 91.00 from holding Insignia Financial or generate 25.85% 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. Insignia Financial
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Insignia Financial |
Aneka Tambang and Insignia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Insignia Financial
The main advantage of trading using opposite Aneka Tambang and Insignia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Insignia Financial 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 Insignia Financial will offset losses from the drop in Insignia Financial's long position.| Aneka Tambang vs. Bisalloy Steel Group | Aneka Tambang vs. Duxton Broadacre Farms | Aneka Tambang vs. Galena Mining | Aneka Tambang vs. Treasury Wine Estates |
| Insignia Financial vs. Falcon Metals | Insignia Financial vs. Credit Clear | Insignia Financial vs. Liberty Financial Group | Insignia Financial vs. Auswide Bank |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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