Correlation Between Aeva Technologies, and Indo Tambangraya

Can any of the company-specific risk be diversified away by investing in both Aeva Technologies, and Indo Tambangraya 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 Aeva Technologies, and Indo Tambangraya into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aeva Technologies, Common and Indo Tambangraya Megah, you can compare the effects of market volatilities on Aeva Technologies, and Indo Tambangraya 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 Aeva Technologies, with a short position of Indo Tambangraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeva Technologies, and Indo Tambangraya.

Diversification Opportunities for Aeva Technologies, and Indo Tambangraya

0.28

Correlation Coefficient

Aeva Technologies,  Indo Tambangraya

Modest diversification

The 3 months correlation between Aeva and Indo is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies, Common and Indo Tambangraya Megah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Tambangraya Megah and Aeva Technologies, 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 Aeva Technologies, Common are associated (or correlated) with Indo Tambangraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Tambangraya Megah has no effect on the direction of Aeva Technologies, i.e., Aeva Technologies, and Indo Tambangraya go up and down completely randomly.

Pair Corralation between Aeva Technologies, and Indo Tambangraya

Given the investment horizon of 90 days Aeva Technologies, Common is expected to generate 2.19 times more return on investment than Indo Tambangraya. However, Aeva Technologies, is 2.19 times more volatile than Indo Tambangraya Megah. It trades about 0.1 of its potential returns per unit of risk. Indo Tambangraya Megah is currently generating about -0.06 per unit of risk. If you would invest  475.00  in Aeva Technologies, Common on December 28, 2024 and sell it today you would earn a total of  163.00  from holding Aeva Technologies, Common or generate 34.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Aeva Technologies, Common  vs.  Indo Tambangraya Megah

Aeva Technologies, Common

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aeva Technologies, Common are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aeva Technologies, sustained solid returns over the last few months and may actually be approaching a breakup point.

Indo Tambangraya Megah

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indo Tambangraya Megah has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Aeva Technologies, and Indo Tambangraya

The main advantage of trading using opposite Aeva Technologies, and Indo Tambangraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeva Technologies, position performs unexpectedly, Indo Tambangraya 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 Indo Tambangraya will offset losses from the drop in Indo Tambangraya's long position.

The idea behind Aeva Technologies, Common and Indo Tambangraya Megah pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.