Correlation Between Aneka Tambang and OD6 Metals
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and OD6 Metals 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 OD6 Metals 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 OD6 Metals, you can compare the effects of market volatilities on Aneka Tambang and OD6 Metals 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 OD6 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and OD6 Metals.
Diversification Opportunities for Aneka Tambang and OD6 Metals
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aneka and OD6 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and OD6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OD6 Metals 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 OD6 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OD6 Metals has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and OD6 Metals go up and down completely randomly.
Pair Corralation between Aneka Tambang and OD6 Metals
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.16 times more return on investment than OD6 Metals. However, Aneka Tambang Tbk is 6.39 times less risky than OD6 Metals. It trades about -0.03 of its potential returns per unit of risk. OD6 Metals is currently generating about -0.03 per unit of risk. If you would invest 106.00 in Aneka Tambang Tbk on September 4, 2024 and sell it today you would lose (16.00) from holding Aneka Tambang Tbk or give up 15.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. OD6 Metals
Performance |
| Timeline |
| Aneka Tambang Tbk |
| OD6 Metals |
Aneka Tambang and OD6 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and OD6 Metals
The main advantage of trading using opposite Aneka Tambang and OD6 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, OD6 Metals 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 OD6 Metals will offset losses from the drop in OD6 Metals' long position.| Aneka Tambang vs. Ora Banda Mining | Aneka Tambang vs. Evolution Mining | Aneka Tambang vs. Queste Communications | Aneka Tambang vs. Metro Mining |
| OD6 Metals vs. Northern Star Resources | OD6 Metals vs. Evolution Mining | OD6 Metals vs. Bluescope Steel | OD6 Metals vs. Sandfire Resources NL |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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