Correlation Between Aneka Tambang and Ras Technology
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Ras Technology 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 Ras Technology 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 Ras Technology Holdings, you can compare the effects of market volatilities on Aneka Tambang and Ras Technology 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 Ras Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Ras Technology.
Diversification Opportunities for Aneka Tambang and Ras Technology
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aneka and Ras is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Ras Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ras Technology Holdings 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 Ras Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ras Technology Holdings has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Ras Technology go up and down completely randomly.
Pair Corralation between Aneka Tambang and Ras Technology
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Ras Technology. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 2.18 times less risky than Ras Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Ras Technology Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Ras Technology Holdings on August 25, 2024 and sell it today you would earn a total of 18.00 from holding Ras Technology Holdings or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Ras Technology Holdings
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Ras Technology Holdings |
Aneka Tambang and Ras Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Ras Technology
The main advantage of trading using opposite Aneka Tambang and Ras Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Ras Technology 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 Ras Technology will offset losses from the drop in Ras Technology's long position.| Aneka Tambang vs. Event Hospitality and | Aneka Tambang vs. Gold Road Resources | Aneka Tambang vs. Treasury Wine Estates | Aneka Tambang vs. Apiam Animal Health |
| Ras Technology vs. Aneka Tambang Tbk | Ras Technology vs. BHP Group Limited | Ras Technology vs. Rio Tinto | Ras Technology vs. Macquarie Group Ltd |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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