Correlation Between Aneka Tambang and Medical Developments
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Medical Developments 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 Medical Developments 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 Medical Developments International, you can compare the effects of market volatilities on Aneka Tambang and Medical Developments 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 Medical Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Medical Developments.
Diversification Opportunities for Aneka Tambang and Medical Developments
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aneka and Medical is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Medical Developments Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Developments 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 Medical Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Developments has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Medical Developments go up and down completely randomly.
Pair Corralation between Aneka Tambang and Medical Developments
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.34 times more return on investment than Medical Developments. However, Aneka Tambang Tbk is 2.94 times less risky than Medical Developments. It trades about 0.0 of its potential returns per unit of risk. Medical Developments International is currently generating about -0.04 per unit of risk. If you would invest 97.00 in Aneka Tambang Tbk on September 2, 2024 and sell it today you would lose (7.00) from holding Aneka Tambang Tbk or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Medical Developments Internati
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Medical Developments |
Aneka Tambang and Medical Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Medical Developments
The main advantage of trading using opposite Aneka Tambang and Medical Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Medical Developments 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 Medical Developments will offset losses from the drop in Medical Developments' long position.| Aneka Tambang vs. Bio Gene Technology | Aneka Tambang vs. MFF Capital Investments | Aneka Tambang vs. Auctus Alternative Investments | Aneka Tambang vs. ABACUS STORAGE KING |
| Medical Developments vs. Steamships Trading | Medical Developments vs. Carlton Investments | Medical Developments vs. Diversified United Investment | Medical Developments vs. Collins Foods |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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