Correlation Between Aneka Tambang and Perseus Mining

Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Perseus Mining 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 Perseus Mining 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 Perseus Mining, you can compare the effects of market volatilities on Aneka Tambang and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Perseus Mining.

Diversification Opportunities for Aneka Tambang and Perseus Mining

0.76

Correlation Coefficient

Aneka Tambang  Perseus Mining

Poor diversification

The 3 months correlation between Aneka and Perseus is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Perseus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Perseus Mining go up and down completely randomly.

Pair Corralation between Aneka Tambang and Perseus Mining

Assuming the 90 days trading horizon Aneka Tambang is expected to generate 2.58 times less return on investment than Perseus Mining. But when comparing it to its historical volatility, Aneka Tambang Tbk is 2.22 times less risky than Perseus Mining. It trades about 0.2 of its potential returns per unit of risk. Perseus Mining is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  256.00  in Perseus Mining on December 30, 2024 and sell it today you would earn a total of  78.00  from holding Perseus Mining or generate 30.47% return on investment over 90 days.

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

Aneka Tambang Tbk  vs.  Perseus Mining

Aneka Tambang Tbk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aneka Tambang Tbk are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Aneka Tambang may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Perseus Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Perseus Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aneka Tambang and Perseus Mining

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

The idea behind Aneka Tambang Tbk and Perseus Mining 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.