Correlation Between Indo Tambangraya and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Indo Tambangraya 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 Indo Tambangraya and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Tambangraya Megah and Aneka Tambang Persero, you can compare the effects of market volatilities on Indo Tambangraya 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 Indo Tambangraya with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Tambangraya and Aneka Tambang.
Diversification Opportunities for Indo Tambangraya and Aneka Tambang
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indo and Aneka is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Indo Tambangraya Megah 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 Indo Tambangraya 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 Indo Tambangraya Megah 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 Indo Tambangraya i.e., Indo Tambangraya and Aneka Tambang go up and down completely randomly.
Pair Corralation between Indo Tambangraya and Aneka Tambang
Assuming the 90 days trading horizon Indo Tambangraya Megah is expected to generate 0.43 times more return on investment than Aneka Tambang. However, Indo Tambangraya Megah is 2.34 times less risky than Aneka Tambang. It trades about 0.29 of its potential returns per unit of risk. Aneka Tambang Persero is currently generating about -0.15 per unit of risk. If you would invest 2,545,000 in Indo Tambangraya Megah on August 30, 2024 and sell it today you would earn a total of 197,500 from holding Indo Tambangraya Megah or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Tambangraya Megah vs. Aneka Tambang Persero
Performance |
| Timeline |
| Indo Tambangraya Megah |
| Aneka Tambang Persero |
Indo Tambangraya and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Tambangraya and Aneka Tambang
The main advantage of trading using opposite Indo Tambangraya and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Tambangraya 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.| Indo Tambangraya vs. Bukit Asam Tbk | Indo Tambangraya vs. Adaro Energy Tbk | Indo Tambangraya vs. United Tractors Tbk | Indo Tambangraya vs. Vale Indonesia Tbk |
| Aneka Tambang vs. Perusahaan Gas Negara | Aneka Tambang vs. Vale Indonesia Tbk | Aneka Tambang vs. Bukit Asam Tbk | Aneka Tambang vs. Telkom Indonesia Tbk |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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