Correlation Between Saranacentral Bajatama and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Saranacentral Bajatama 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 Saranacentral Bajatama and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saranacentral Bajatama Tbk and Aneka Tambang Persero, you can compare the effects of market volatilities on Saranacentral Bajatama 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 Saranacentral Bajatama with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saranacentral Bajatama and Aneka Tambang.
Diversification Opportunities for Saranacentral Bajatama and Aneka Tambang
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saranacentral and Aneka is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Saranacentral Bajatama Tbk and Aneka Tambang Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aneka Tambang Persero and Saranacentral Bajatama 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 Saranacentral Bajatama Tbk 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 Persero has no effect on the direction of Saranacentral Bajatama i.e., Saranacentral Bajatama and Aneka Tambang go up and down completely randomly.
Pair Corralation between Saranacentral Bajatama and Aneka Tambang
Assuming the 90 days trading horizon Saranacentral Bajatama Tbk is expected to generate 1.87 times more return on investment than Aneka Tambang. However, Saranacentral Bajatama is 1.87 times more volatile than Aneka Tambang Persero. It trades about 0.03 of its potential returns per unit of risk. Aneka Tambang Persero is currently generating about -0.18 per unit of risk. If you would invest 10,200 in Saranacentral Bajatama Tbk on August 24, 2024 and sell it today you would earn a total of 100.00 from holding Saranacentral Bajatama Tbk or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Saranacentral Bajatama Tbk vs. Aneka Tambang Persero
Performance |
| Timeline |
| Saranacentral Bajatama |
| Aneka Tambang Persero |
Saranacentral Bajatama and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saranacentral Bajatama and Aneka Tambang
The main advantage of trading using opposite Saranacentral Bajatama and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saranacentral Bajatama 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.| Saranacentral Bajatama vs. Kedaung Indah Can | Saranacentral Bajatama vs. Langgeng Makmur Industri | Saranacentral Bajatama vs. Kabelindo Murni Tbk | Saranacentral Bajatama vs. Mustika Ratu Tbk |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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