Correlation Between Aneka Tambang and Gratifii

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

By analyzing existing cross correlation between Aneka Tambang Tbk and Gratifii, you can compare the effects of market volatilities on Aneka Tambang and Gratifii 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 Gratifii. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Gratifii.

Diversification Opportunities for Aneka Tambang and Gratifii

-0.64

Correlation Coefficient

Aneka Tambang  Gratifii

Excellent diversification

The 3 months correlation between Aneka and Gratifii is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Gratifii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gratifii 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 Tbk are associated (or correlated) with Gratifii. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gratifii has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Gratifii go up and down completely randomly.

Pair Corralation between Aneka Tambang and Gratifii

Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Gratifii. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 5.59 times less risky than Gratifii. The stock trades about -0.05 of its potential returns per unit of risk. The Gratifii is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  5.25  in Gratifii on September 12, 2024 and sell it today you would earn a total of  5.75  from holding Gratifii or generate 109.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Aneka Tambang Tbk  vs.  Gratifii

Aneka Tambang Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aneka Tambang Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Gratifii

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gratifii are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Gratifii unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aneka Tambang and Gratifii

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

The idea behind Aneka Tambang Tbk and Gratifii 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.