Correlation Between American West and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both American West and Aneka Tambang 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 American West and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American West Metals and Aneka Tambang Tbk, you can compare the effects of market volatilities on American West and Aneka Tambang 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 American West with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of American West and Aneka Tambang.
Diversification Opportunities for American West and Aneka Tambang
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Aneka is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding American West Metals and Aneka Tambang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aneka Tambang Tbk and American West 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 American West Metals are associated (or correlated) with Aneka Tambang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aneka Tambang Tbk has no effect on the direction of American West i.e., American West and Aneka Tambang go up and down completely randomly.
Pair Corralation between American West and Aneka Tambang
Assuming the 90 days trading horizon American West Metals is expected to under-perform the Aneka Tambang. In addition to that, American West is 2.49 times more volatile than Aneka Tambang Tbk. It trades about -0.31 of its total potential returns per unit of risk. Aneka Tambang Tbk is currently generating about 0.36 per unit of volatility. If you would invest 90.00 in Aneka Tambang Tbk on November 28, 2024 and sell it today you would earn a total of 10.00 from holding Aneka Tambang Tbk or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American West Metals vs. Aneka Tambang Tbk
Performance |
| Timeline |
| American West Metals |
| Aneka Tambang Tbk |
American West and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American West and Aneka Tambang
The main advantage of trading using opposite American West and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American West position performs unexpectedly, Aneka Tambang 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 Aneka Tambang will offset losses from the drop in Aneka Tambang's long position.| American West vs. Australian Strategic Materials | American West vs. Regal Funds Management | American West vs. Carawine Resources Limited | American West vs. Lendlease Group |
| Aneka Tambang vs. Carlton Investments | Aneka Tambang vs. MotorCycle Holdings | Aneka Tambang vs. Steamships Trading | Aneka Tambang vs. Clime Investment Management |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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