Correlation Between Aneka Tambang and WA Kaolin
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and WA Kaolin 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 WA Kaolin 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 WA Kaolin, you can compare the effects of market volatilities on Aneka Tambang and WA Kaolin 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 WA Kaolin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and WA Kaolin.
Diversification Opportunities for Aneka Tambang and WA Kaolin
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aneka and WAK is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and WA Kaolin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WA Kaolin 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 WA Kaolin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WA Kaolin has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and WA Kaolin go up and down completely randomly.
Pair Corralation between Aneka Tambang and WA Kaolin
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the WA Kaolin. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 2.69 times less risky than WA Kaolin. The stock trades about -0.08 of its potential returns per unit of risk. The WA Kaolin is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.30 in WA Kaolin on September 2, 2024 and sell it today you would earn a total of 1.60 from holding WA Kaolin or generate 37.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. WA Kaolin
Performance |
| Timeline |
| Aneka Tambang Tbk |
| WA Kaolin |
Aneka Tambang and WA Kaolin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and WA Kaolin
The main advantage of trading using opposite Aneka Tambang and WA Kaolin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, WA Kaolin 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 WA Kaolin will offset losses from the drop in WA Kaolin's long position.| Aneka Tambang vs. Bio Gene Technology | Aneka Tambang vs. MFF Capital Investments | Aneka Tambang vs. Auctus Alternative Investments | Aneka Tambang vs. ABACUS STORAGE KING |
| WA Kaolin vs. Northern Star Resources | WA Kaolin vs. Evolution Mining | WA Kaolin vs. Bluescope Steel | WA Kaolin 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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