Correlation Between Aneka Tambang and Johns Lyng
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Johns Lyng 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 Johns Lyng 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 Johns Lyng Group, you can compare the effects of market volatilities on Aneka Tambang and Johns Lyng 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 Johns Lyng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Johns Lyng.
Diversification Opportunities for Aneka Tambang and Johns Lyng
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aneka and Johns is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Johns Lyng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johns Lyng 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 Johns Lyng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johns Lyng Group has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Johns Lyng go up and down completely randomly.
Pair Corralation between Aneka Tambang and Johns Lyng
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.53 times more return on investment than Johns Lyng. However, Aneka Tambang Tbk is 1.9 times less risky than Johns Lyng. It trades about -0.08 of its potential returns per unit of risk. Johns Lyng Group is currently generating about -0.05 per unit of risk. If you would invest 108.00 in Aneka Tambang Tbk on September 1, 2024 and sell it today you would lose (18.00) from holding Aneka Tambang Tbk or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Johns Lyng Group
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Johns Lyng Group |
Aneka Tambang and Johns Lyng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Johns Lyng
The main advantage of trading using opposite Aneka Tambang and Johns Lyng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Johns Lyng 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 Johns Lyng will offset losses from the drop in Johns Lyng'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 |
| Johns Lyng vs. Aneka Tambang Tbk | Johns Lyng vs. BHP Group Limited | Johns Lyng vs. Commonwealth Bank of | Johns Lyng vs. Commonwealth Bank of |
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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