Correlation Between Macquarie Technology and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Macquarie Technology and Aneka Tambang 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 Macquarie Technology and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Technology Group and Aneka Tambang Tbk, you can compare the effects of market volatilities on Macquarie Technology and Aneka Tambang 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 Macquarie Technology with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Technology and Aneka Tambang.
Diversification Opportunities for Macquarie Technology and Aneka Tambang
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Macquarie and Aneka is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group and Aneka Tambang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aneka Tambang Tbk and Macquarie Technology 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 Macquarie Technology Group are associated (or correlated) with Aneka Tambang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aneka Tambang Tbk has no effect on the direction of Macquarie Technology i.e., Macquarie Technology and Aneka Tambang go up and down completely randomly.
Pair Corralation between Macquarie Technology and Aneka Tambang
Assuming the 90 days trading horizon Macquarie Technology Group is expected to under-perform the Aneka Tambang. In addition to that, Macquarie Technology is 1.41 times more volatile than Aneka Tambang Tbk. It trades about -0.23 of its total potential returns per unit of risk. Aneka Tambang Tbk is currently generating about 0.15 per unit of volatility. If you would invest 90.00 in Aneka Tambang Tbk on December 2, 2024 and sell it today you would earn a total of 10.00 from holding Aneka Tambang Tbk or generate 11.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Macquarie Technology Group vs. Aneka Tambang Tbk
Performance |
Timeline |
Macquarie Technology |
Aneka Tambang Tbk |
Macquarie Technology and Aneka Tambang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Macquarie Technology and Aneka Tambang
The main advantage of trading using opposite Macquarie Technology and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology position performs unexpectedly, Aneka Tambang 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 Aneka Tambang will offset losses from the drop in Aneka Tambang's long position.Macquarie Technology vs. TPG Telecom | Macquarie Technology vs. Sports Entertainment Group | Macquarie Technology vs. Hotel Property Investments | Macquarie Technology vs. Truscott Mining Corp |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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