Correlation Between Macquarie and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Macquarie 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 Macquarie and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group and Aneka Tambang Tbk, you can compare the effects of market volatilities on Macquarie 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 Macquarie with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie and Aneka Tambang.
Diversification Opportunities for Macquarie and Aneka Tambang
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Aneka is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group 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 Macquarie 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 Macquarie Group 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 Macquarie i.e., Macquarie and Aneka Tambang go up and down completely randomly.
Pair Corralation between Macquarie and Aneka Tambang
Assuming the 90 days trading horizon Macquarie Group is expected to generate 1.17 times more return on investment than Aneka Tambang. However, Macquarie is 1.17 times more volatile than Aneka Tambang Tbk. It trades about 0.07 of its potential returns per unit of risk. Aneka Tambang Tbk is currently generating about 0.0 per unit of risk. If you would invest 23,301 in Macquarie Group on November 4, 2024 and sell it today you would earn a total of 779.00 from holding Macquarie Group or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group vs. Aneka Tambang Tbk
Performance |
| Timeline |
| Macquarie Group |
| Aneka Tambang Tbk |
Macquarie and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie and Aneka Tambang
The main advantage of trading using opposite Macquarie and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie 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.| Macquarie vs. Land Homes Group | Macquarie vs. Ambertech | Macquarie vs. Australian Unity Office | Macquarie vs. Ras Technology Holdings |
| Aneka Tambang vs. Bisalloy Steel Group | Aneka Tambang vs. Duxton Broadacre Farms | Aneka Tambang vs. Galena Mining | Aneka Tambang vs. Treasury Wine Estates |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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