Correlation Between Aneka Tambang and SG Fleet
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and SG Fleet 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 SG Fleet 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 SG Fleet Group, you can compare the effects of market volatilities on Aneka Tambang and SG Fleet 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 SG Fleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and SG Fleet.
Diversification Opportunities for Aneka Tambang and SG Fleet
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aneka and SGF is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and SG Fleet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SG Fleet Group 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 SG Fleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SG Fleet Group has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and SG Fleet go up and down completely randomly.
Pair Corralation between Aneka Tambang and SG Fleet
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the SG Fleet. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 1.45 times less risky than SG Fleet. The stock trades about 0.0 of its potential returns per unit of risk. The SG Fleet Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 271.00 in SG Fleet Group on October 26, 2024 and sell it today you would earn a total of 73.00 from holding SG Fleet Group or generate 26.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aneka Tambang Tbk vs. SG Fleet Group
Performance |
Timeline |
Aneka Tambang Tbk |
SG Fleet Group |
Aneka Tambang and SG Fleet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aneka Tambang and SG Fleet
The main advantage of trading using opposite Aneka Tambang and SG Fleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, SG Fleet 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 SG Fleet will offset losses from the drop in SG Fleet's long position.Aneka Tambang vs. Everest Metals | ||
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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