Correlation Between Aneka Tambang and Immuron
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Immuron 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 Immuron 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 Immuron, you can compare the effects of market volatilities on Aneka Tambang and Immuron 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 Immuron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Immuron.
Diversification Opportunities for Aneka Tambang and Immuron
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aneka and Immuron is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Immuron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immuron 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 Immuron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immuron has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Immuron go up and down completely randomly.
Pair Corralation between Aneka Tambang and Immuron
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Immuron. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 6.12 times less risky than Immuron. The stock trades about -0.05 of its potential returns per unit of risk. The Immuron is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.60 in Immuron on September 1, 2024 and sell it today you would earn a total of 1.10 from holding Immuron or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Immuron
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Immuron |
Aneka Tambang and Immuron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Immuron
The main advantage of trading using opposite Aneka Tambang and Immuron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Immuron 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 Immuron will offset losses from the drop in Immuron's long position.| Aneka Tambang vs. Northern Star Resources | Aneka Tambang vs. Evolution Mining | Aneka Tambang vs. Bluescope Steel | Aneka Tambang vs. Sandfire Resources NL |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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