Correlation Between Aneka Tambang and Soechi Lines

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Soechi Lines 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 Tambang and Soechi Lines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aneka Tambang Persero and Soechi Lines Tbk, you can compare the effects of market volatilities on Aneka Tambang and Soechi Lines 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 Tambang with a short position of Soechi Lines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Soechi Lines.

Diversification Opportunities for Aneka Tambang and Soechi Lines

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Aneka and Soechi is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Persero and Soechi Lines Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soechi Lines Tbk and Aneka Tambang 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 Tambang Persero are associated (or correlated) with Soechi Lines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soechi Lines Tbk has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Soechi Lines go up and down completely randomly.

Pair Corralation between Aneka Tambang and Soechi Lines

Assuming the 90 days trading horizon Aneka Tambang Persero is expected to generate 1.49 times more return on investment than Soechi Lines. However, Aneka Tambang is 1.49 times more volatile than Soechi Lines Tbk. It trades about -0.01 of its potential returns per unit of risk. Soechi Lines Tbk is currently generating about -0.09 per unit of risk. If you would invest  148,000  in Aneka Tambang Persero on September 28, 2024 and sell it today you would lose (4,500) from holding Aneka Tambang Persero or give up 3.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Aneka Tambang Persero  vs.  Soechi Lines Tbk

 Performance 
       Timeline  
Aneka Tambang Persero 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aneka Tambang Persero has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Aneka Tambang is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Soechi Lines Tbk 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Soechi Lines Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Aneka Tambang and Soechi Lines Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aneka Tambang and Soechi Lines

The main advantage of trading using opposite Aneka Tambang and Soechi Lines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Soechi Lines 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 Soechi Lines will offset losses from the drop in Soechi Lines' long position.
The idea behind Aneka Tambang Persero and Soechi Lines Tbk 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.
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

Other Complementary Tools

Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Content Syndication
Quickly integrate customizable finance content to your own investment portal
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios