Correlation Between United Tractors and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both United Tractors 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 United Tractors and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Tractors Tbk and Aneka Tambang Persero, you can compare the effects of market volatilities on United Tractors 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 United Tractors with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Tractors and Aneka Tambang.
Diversification Opportunities for United Tractors and Aneka Tambang
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Aneka is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding United Tractors 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 United Tractors 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 United Tractors 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 United Tractors i.e., United Tractors and Aneka Tambang go up and down completely randomly.
Pair Corralation between United Tractors and Aneka Tambang
Assuming the 90 days trading horizon United Tractors Tbk is expected to generate 0.68 times more return on investment than Aneka Tambang. However, United Tractors Tbk is 1.48 times less risky than Aneka Tambang. It trades about 0.09 of its potential returns per unit of risk. Aneka Tambang Persero is currently generating about -0.02 per unit of risk. If you would invest 2,062,194 in United Tractors Tbk on August 25, 2024 and sell it today you would earn a total of 637,806 from holding United Tractors Tbk or generate 30.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Tractors Tbk vs. Aneka Tambang Persero
Performance |
| Timeline |
| United Tractors Tbk |
| Aneka Tambang Persero |
United Tractors and Aneka Tambang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Tractors and Aneka Tambang
The main advantage of trading using opposite United Tractors and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Tractors 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.| United Tractors vs. Astra International Tbk | United Tractors vs. Bukit Asam Tbk | United Tractors vs. Semen Indonesia Persero | United Tractors vs. PT Indofood Sukses |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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