Correlation Between Aneka Tambang and Predictive Discovery
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Predictive Discovery 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 Predictive Discovery 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 Predictive Discovery, you can compare the effects of market volatilities on Aneka Tambang and Predictive Discovery 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 Predictive Discovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Predictive Discovery.
Diversification Opportunities for Aneka Tambang and Predictive Discovery
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aneka and Predictive is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Predictive Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predictive Discovery 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 Predictive Discovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predictive Discovery has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Predictive Discovery go up and down completely randomly.
Pair Corralation between Aneka Tambang and Predictive Discovery
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Predictive Discovery. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 2.64 times less risky than Predictive Discovery. The stock trades about -0.07 of its potential returns per unit of risk. The Predictive Discovery is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Predictive Discovery on September 5, 2024 and sell it today you would earn a total of 5.00 from holding Predictive Discovery or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Predictive Discovery
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Predictive Discovery |
Aneka Tambang and Predictive Discovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Predictive Discovery
The main advantage of trading using opposite Aneka Tambang and Predictive Discovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Predictive Discovery 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 Predictive Discovery will offset losses from the drop in Predictive Discovery's long position.| Aneka Tambang vs. Home Consortium | Aneka Tambang vs. Singular Health Group | Aneka Tambang vs. Oneview Healthcare PLC | Aneka Tambang vs. Regis Healthcare |
| Predictive Discovery vs. Northern Star Resources | Predictive Discovery vs. Sandfire Resources NL | Predictive Discovery vs. Aneka Tambang Tbk |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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