Correlation Between Aneka Tambang and Vulcan Energy
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Vulcan Energy 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 Vulcan Energy 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 Vulcan Energy Resources, you can compare the effects of market volatilities on Aneka Tambang and Vulcan Energy 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 Vulcan Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Vulcan Energy.
Diversification Opportunities for Aneka Tambang and Vulcan Energy
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aneka and Vulcan is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Vulcan Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Energy Resources 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 Vulcan Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Energy Resources has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Vulcan Energy go up and down completely randomly.
Pair Corralation between Aneka Tambang and Vulcan Energy
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Vulcan Energy. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 2.15 times less risky than Vulcan Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Vulcan Energy Resources is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 533.00 in Vulcan Energy Resources on August 30, 2024 and sell it today you would earn a total of 178.00 from holding Vulcan Energy Resources or generate 33.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Vulcan Energy Resources
Performance |
| Timeline |
| Aneka Tambang Tbk |
| Vulcan Energy Resources |
Aneka Tambang and Vulcan Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and Vulcan Energy
The main advantage of trading using opposite Aneka Tambang and Vulcan Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Vulcan Energy 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 Vulcan Energy will offset losses from the drop in Vulcan Energy's long position.| Aneka Tambang vs. Stelar Metals | Aneka Tambang vs. Ainsworth Game Technology | Aneka Tambang vs. Collins Foods | Aneka Tambang vs. American West Metals |
| Vulcan Energy vs. Step One Clothing | Vulcan Energy vs. Janison Education Group | Vulcan Energy vs. Computershare | Vulcan Energy vs. Embark Education Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |