Correlation Between Aneka Tambang and X2M Connect
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and X2M Connect 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 X2M Connect 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 X2M Connect, you can compare the effects of market volatilities on Aneka Tambang and X2M Connect 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 X2M Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and X2M Connect.
Diversification Opportunities for Aneka Tambang and X2M Connect
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aneka and X2M is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and X2M Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X2M Connect 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 X2M Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X2M Connect has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and X2M Connect go up and down completely randomly.
Pair Corralation between Aneka Tambang and X2M Connect
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.5 times more return on investment than X2M Connect. However, Aneka Tambang Tbk is 2.0 times less risky than X2M Connect. It trades about -0.08 of its potential returns per unit of risk. X2M Connect is currently generating about -0.04 per unit of risk. If you would invest 108.00 in Aneka Tambang Tbk on August 30, 2024 and sell it today you would lose (18.00) from holding Aneka Tambang Tbk or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.66% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. X2M Connect
Performance |
| Timeline |
| Aneka Tambang Tbk |
| X2M Connect |
Aneka Tambang and X2M Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aneka Tambang and X2M Connect
The main advantage of trading using opposite Aneka Tambang and X2M Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, X2M Connect 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 X2M Connect will offset losses from the drop in X2M Connect'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 |
| X2M Connect vs. Hudson Investment Group | X2M Connect vs. Garda Diversified Ppty | X2M Connect vs. Advanced Braking Technology | X2M Connect vs. A1 Investments Resources |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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