Correlation Between Aneka Tambang and Macquarie Group
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Macquarie Group 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 Macquarie Group 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 Macquarie Group Ltd, you can compare the effects of market volatilities on Aneka Tambang and Macquarie Group 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 Macquarie Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Macquarie Group.
Diversification Opportunities for Aneka Tambang and Macquarie Group
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aneka and Macquarie is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Macquarie Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie 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 Macquarie Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Macquarie Group go up and down completely randomly.
Pair Corralation between Aneka Tambang and Macquarie Group
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Macquarie Group. In addition to that, Aneka Tambang is 3.8 times more volatile than Macquarie Group Ltd. It trades about -0.1 of its total potential returns per unit of risk. Macquarie Group Ltd is currently generating about 0.06 per unit of volatility. If you would invest 10,223 in Macquarie Group Ltd on August 28, 2024 and sell it today you would earn a total of 327.00 from holding Macquarie Group Ltd or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Macquarie Group Ltd
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Macquarie Group |
Aneka Tambang and Macquarie Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Macquarie Group
The main advantage of trading using opposite Aneka Tambang and Macquarie Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Macquarie Group 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 Macquarie Group will offset losses from the drop in Macquarie Group's long position.| Aneka Tambang vs. Hawsons Iron | Aneka Tambang vs. Carlton Investments | Aneka Tambang vs. MFF Capital Investments | Aneka Tambang vs. Mount Gibson Iron |
| Macquarie Group vs. AMP | Macquarie Group vs. Regal Investment | Macquarie Group vs. REGAL ASIAN INVESTMENTS |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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