Correlation Between Microba Life and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Microba Life 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 Microba Life and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microba Life Sciences and Aneka Tambang Tbk, you can compare the effects of market volatilities on Microba Life 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 Microba Life with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microba Life and Aneka Tambang.
Diversification Opportunities for Microba Life and Aneka Tambang
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microba and Aneka is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Microba Life Sciences 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 Microba Life 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 Microba Life Sciences 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 Microba Life i.e., Microba Life and Aneka Tambang go up and down completely randomly.
Pair Corralation between Microba Life and Aneka Tambang
Assuming the 90 days trading horizon Microba Life Sciences is expected to generate 2.76 times more return on investment than Aneka Tambang. However, Microba Life is 2.76 times more volatile than Aneka Tambang Tbk. It trades about 0.24 of its potential returns per unit of risk. Aneka Tambang Tbk is currently generating about 0.32 per unit of risk. If you would invest 16.00 in Microba Life Sciences on September 24, 2024 and sell it today you would earn a total of 3.00 from holding Microba Life Sciences or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microba Life Sciences vs. Aneka Tambang Tbk
Performance |
| Timeline |
| Microba Life Sciences |
| Aneka Tambang Tbk |
Microba Life and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microba Life and Aneka Tambang
The main advantage of trading using opposite Microba Life and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microba Life 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.| Microba Life vs. Aneka Tambang Tbk | Microba Life vs. BHP Group Limited | Microba Life vs. Commonwealth Bank | Microba Life vs. Commonwealth Bank of |
| Aneka Tambang vs. Advanced Braking Technology | Aneka Tambang vs. Aussie Broadband | Aneka Tambang vs. WiseTech Global Limited | Aneka Tambang vs. Beston Global Food |
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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