Correlation Between Maggie Beer and Aneka Tambang

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

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

Diversification Opportunities for Maggie Beer and Aneka Tambang

0.33

Correlation Coefficient

Maggie Beer  Aneka Tambang

Weak diversification

The 3 months correlation between Maggie and Aneka is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Maggie Beer Holdings 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 Maggie Beer 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 Maggie Beer Holdings 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 Maggie Beer i.e., Maggie Beer and Aneka Tambang go up and down completely randomly.

Pair Corralation between Maggie Beer and Aneka Tambang

Assuming the 90 days trading horizon Maggie Beer Holdings is expected to generate 2.39 times more return on investment than Aneka Tambang. However, Maggie Beer is 2.39 times more volatile than Aneka Tambang Tbk. It trades about 0.07 of its potential returns per unit of risk. Aneka Tambang Tbk is currently generating about 0.01 per unit of risk. If you would invest  5.60  in Maggie Beer Holdings on October 6, 2024 and sell it today you would earn a total of  0.20  from holding Maggie Beer Holdings or generate 3.57% return on investment over 90 days.

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

Maggie Beer Holdings  vs.  Aneka Tambang Tbk

Maggie Beer Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maggie Beer Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with Maggie Beer and Aneka Tambang

The main advantage of trading using opposite Maggie Beer and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maggie Beer 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.

The idea behind Maggie Beer Holdings and Aneka Tambang Tbk 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.