Correlation Between Aneka Gas and Saratoga Investama

Can any of the company-specific risk be diversified away by investing in both Aneka Gas and Saratoga Investama 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 Aneka Gas and Saratoga Investama into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aneka Gas Industri and Saratoga Investama Sedaya, you can compare the effects of market volatilities on Aneka Gas and Saratoga Investama 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 Aneka Gas with a short position of Saratoga Investama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Gas and Saratoga Investama.

Diversification Opportunities for Aneka Gas and Saratoga Investama

0.82

Correlation Coefficient

Aneka Gas  Saratoga Investama

Very poor diversification

The 3 months correlation between Aneka and Saratoga is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Gas Industri and Saratoga Investama Sedaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investama Sedaya and Aneka Gas 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 Aneka Gas Industri are associated (or correlated) with Saratoga Investama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investama Sedaya has no effect on the direction of Aneka Gas i.e., Aneka Gas and Saratoga Investama go up and down completely randomly.

Pair Corralation between Aneka Gas and Saratoga Investama

Assuming the 90 days trading horizon Aneka Gas Industri is expected to generate 0.69 times more return on investment than Saratoga Investama. However, Aneka Gas Industri is 1.45 times less risky than Saratoga Investama. It trades about -0.09 of its potential returns per unit of risk. Saratoga Investama Sedaya is currently generating about -0.1 per unit of risk. If you would invest  140,000  in Aneka Gas Industri on December 30, 2024 and sell it today you would lose (20,500) from holding Aneka Gas Industri or give up 14.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Aneka Gas Industri  vs.  Saratoga Investama Sedaya

Aneka Gas Industri

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aneka Gas Industri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Saratoga Investama Sedaya

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saratoga Investama Sedaya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Aneka Gas and Saratoga Investama

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

The idea behind Aneka Gas Industri and Saratoga Investama Sedaya 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.