Correlation Between Aneka Tambang and Srj Technologies
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Srj Technologies 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 Srj Technologies 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 Srj Technologies Group, you can compare the effects of market volatilities on Aneka Tambang and Srj Technologies 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 Srj Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Srj Technologies.
Diversification Opportunities for Aneka Tambang and Srj Technologies
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aneka and Srj is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Srj Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Srj Technologies 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 Srj Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Srj Technologies has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Srj Technologies go up and down completely randomly.
Pair Corralation between Aneka Tambang and Srj Technologies
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Srj Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 6.56 times less risky than Srj Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Srj Technologies Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6.10 in Srj Technologies Group on August 29, 2024 and sell it today you would lose (2.40) from holding Srj Technologies Group or give up 39.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Srj Technologies Group
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Srj Technologies |
Aneka Tambang and Srj Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Srj Technologies
The main advantage of trading using opposite Aneka Tambang and Srj Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Srj Technologies 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 Srj Technologies will offset losses from the drop in Srj Technologies' long position.| Aneka Tambang vs. Hawsons Iron | Aneka Tambang vs. Carlton Investments | Aneka Tambang vs. MFF Capital Investments | Aneka Tambang vs. Mount Gibson Iron |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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