Correlation Between Mark Dynamics and Aneka Gas

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

By analyzing existing cross correlation between Mark Dynamics Indonesia and Aneka Gas Industri, you can compare the effects of market volatilities on Mark Dynamics and Aneka Gas 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 Mark Dynamics with a short position of Aneka Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mark Dynamics and Aneka Gas.

Diversification Opportunities for Mark Dynamics and Aneka Gas

-0.29

Correlation Coefficient

Mark Dynamics  Aneka Gas

Very good diversification

The 3 months correlation between Mark and Aneka is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mark Dynamics Indonesia and Aneka Gas Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aneka Gas Industri and Mark Dynamics 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 Mark Dynamics Indonesia are associated (or correlated) with Aneka Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aneka Gas Industri has no effect on the direction of Mark Dynamics i.e., Mark Dynamics and Aneka Gas go up and down completely randomly.

Pair Corralation between Mark Dynamics and Aneka Gas

Assuming the 90 days trading horizon Mark Dynamics Indonesia is expected to generate 3.65 times more return on investment than Aneka Gas. However, Mark Dynamics is 3.65 times more volatile than Aneka Gas Industri. It trades about 0.1 of its potential returns per unit of risk. Aneka Gas Industri is currently generating about -0.25 per unit of risk. If you would invest  91,237  in Mark Dynamics Indonesia on September 13, 2024 and sell it today you would earn a total of  15,263  from holding Mark Dynamics Indonesia or generate 16.73% return on investment over 90 days.

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

Mark Dynamics Indonesia  vs.  Aneka Gas Industri

Mark Dynamics Indonesia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mark Dynamics Indonesia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Mark Dynamics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Aneka Gas Industri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aneka Gas Industri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Mark Dynamics and Aneka Gas

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

The idea behind Mark Dynamics Indonesia and Aneka Gas Industri 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.