Correlation Between Aneka Gas and Waskita Beton
Can any of the company-specific risk be diversified away by investing in both Aneka Gas and Waskita Beton 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 Waskita Beton 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 Waskita Beton Precast, you can compare the effects of market volatilities on Aneka Gas and Waskita Beton 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 Waskita Beton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Gas and Waskita Beton.
Diversification Opportunities for Aneka Gas and Waskita Beton
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aneka and Waskita is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Gas Industri and Waskita Beton Precast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waskita Beton Precast 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 Waskita Beton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waskita Beton Precast has no effect on the direction of Aneka Gas i.e., Aneka Gas and Waskita Beton go up and down completely randomly.
Pair Corralation between Aneka Gas and Waskita Beton
Assuming the 90 days trading horizon Aneka Gas Industri is expected to generate 0.67 times more return on investment than Waskita Beton. However, Aneka Gas Industri is 1.5 times less risky than Waskita Beton. It trades about -0.12 of its potential returns per unit of risk. Waskita Beton Precast is currently generating about -0.18 per unit of risk. If you would invest 160,500 in Aneka Gas Industri on December 1, 2024 and sell it today you would lose (27,500) from holding Aneka Gas Industri or give up 17.13% 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. Waskita Beton Precast
Performance |
Timeline |
Aneka Gas Industri |
Waskita Beton Precast |
Aneka Gas and Waskita Beton Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aneka Gas and Waskita Beton
The main advantage of trading using opposite Aneka Gas and Waskita Beton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Gas position performs unexpectedly, Waskita Beton 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 Waskita Beton will offset losses from the drop in Waskita Beton's long position.Aneka Gas vs. Surya Esa Perkasa | Aneka Gas vs. Elang Mahkota Teknologi | Aneka Gas vs. Merdeka Copper Gold | Aneka Gas vs. Saratoga Investama Sedaya |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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