Correlation Between Aneka Tambang and Soechi Lines
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aneka Tambang Persero vs. Soechi Lines Tbk
Performance |
Timeline |
Aneka Tambang Persero |
Soechi Lines Tbk |
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.Aneka Tambang vs. Perusahaan Gas Negara | Aneka Tambang vs. Vale Indonesia Tbk | Aneka Tambang vs. Bukit Asam Tbk | Aneka Tambang vs. Telkom Indonesia Tbk |
Soechi Lines vs. Perusahaan Gas Negara | Soechi Lines vs. Indo Tambangraya Megah | Soechi Lines vs. Aneka Tambang Persero |
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.
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