Correlation Between Mount Gibson and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Mount Gibson 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 Mount Gibson and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mount Gibson Iron and Aneka Tambang Tbk, you can compare the effects of market volatilities on Mount Gibson 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 Mount Gibson with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mount Gibson and Aneka Tambang.
Diversification Opportunities for Mount Gibson and Aneka Tambang
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mount and Aneka is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mount Gibson Iron 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 Mount Gibson 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 Mount Gibson Iron 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 Mount Gibson i.e., Mount Gibson and Aneka Tambang go up and down completely randomly.
Pair Corralation between Mount Gibson and Aneka Tambang
Assuming the 90 days trading horizon Mount Gibson Iron is expected to under-perform the Aneka Tambang. In addition to that, Mount Gibson is 2.68 times more volatile than Aneka Tambang Tbk. It trades about -0.03 of its total potential returns per unit of risk. Aneka Tambang Tbk is currently generating about -0.02 per unit of volatility. If you would invest 101.00 in Aneka Tambang Tbk on November 7, 2024 and sell it today you would lose (11.00) from holding Aneka Tambang Tbk or give up 10.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mount Gibson Iron vs. Aneka Tambang Tbk
Performance |
| Timeline |
| Mount Gibson Iron |
| Aneka Tambang Tbk |
Mount Gibson and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mount Gibson and Aneka Tambang
The main advantage of trading using opposite Mount Gibson and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mount Gibson 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.| Mount Gibson vs. Pearl Gull Iron | Mount Gibson vs. A1 Investments Resources | Mount Gibson vs. Phoslock Environmental Technologies | Mount Gibson vs. Djerriwarrh Investments |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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