Correlation Between OD6 Metals and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both OD6 Metals 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 OD6 Metals and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OD6 Metals and Aneka Tambang Tbk, you can compare the effects of market volatilities on OD6 Metals 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 OD6 Metals with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of OD6 Metals and Aneka Tambang.
Diversification Opportunities for OD6 Metals and Aneka Tambang
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between OD6 and Aneka is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding OD6 Metals 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 OD6 Metals 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 OD6 Metals 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 OD6 Metals i.e., OD6 Metals and Aneka Tambang go up and down completely randomly.
Pair Corralation between OD6 Metals and Aneka Tambang
Assuming the 90 days trading horizon OD6 Metals is expected to under-perform the Aneka Tambang. In addition to that, OD6 Metals is 3.09 times more volatile than Aneka Tambang Tbk. It trades about -0.27 of its total potential returns per unit of risk. Aneka Tambang Tbk is currently generating about -0.09 per unit of volatility. If you would invest 95.00 in Aneka Tambang Tbk on September 1, 2024 and sell it today you would lose (5.00) from holding Aneka Tambang Tbk or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
OD6 Metals vs. Aneka Tambang Tbk
Performance |
| Timeline |
| OD6 Metals |
| Aneka Tambang Tbk |
OD6 Metals and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OD6 Metals and Aneka Tambang
The main advantage of trading using opposite OD6 Metals and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OD6 Metals 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.| OD6 Metals vs. Northern Star Resources | OD6 Metals vs. Evolution Mining | OD6 Metals vs. Bluescope Steel | OD6 Metals vs. Sandfire Resources NL |
| Aneka Tambang vs. Northern Star Resources | Aneka Tambang vs. Evolution Mining | Aneka Tambang vs. Bluescope Steel | Aneka Tambang vs. Sandfire Resources NL |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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