Correlation Between Cikarang Listrindo and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Cikarang Listrindo 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 Cikarang Listrindo and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cikarang Listrindo Tbk and Aneka Tambang Persero, you can compare the effects of market volatilities on Cikarang Listrindo 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 Cikarang Listrindo with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cikarang Listrindo and Aneka Tambang.
Diversification Opportunities for Cikarang Listrindo and Aneka Tambang
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cikarang and Aneka is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cikarang Listrindo Tbk 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 Cikarang Listrindo 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 Cikarang Listrindo Tbk 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 Cikarang Listrindo i.e., Cikarang Listrindo and Aneka Tambang go up and down completely randomly.
Pair Corralation between Cikarang Listrindo and Aneka Tambang
Assuming the 90 days trading horizon Cikarang Listrindo Tbk is expected to generate 0.24 times more return on investment than Aneka Tambang. However, Cikarang Listrindo Tbk is 4.14 times less risky than Aneka Tambang. It trades about -0.04 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 70,500 in Cikarang Listrindo Tbk on August 28, 2024 and sell it today you would lose (500.00) from holding Cikarang Listrindo Tbk or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cikarang Listrindo Tbk vs. Aneka Tambang Persero
Performance |
| Timeline |
| Cikarang Listrindo Tbk |
| Aneka Tambang Persero |
Cikarang Listrindo and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cikarang Listrindo and Aneka Tambang
The main advantage of trading using opposite Cikarang Listrindo and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cikarang Listrindo 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.| Cikarang Listrindo vs. Aneka Tambang Persero | Cikarang Listrindo vs. Bukit Asam Tbk | Cikarang Listrindo vs. Telkom Indonesia Tbk | Cikarang Listrindo vs. Astra International 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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