Correlation Between Platinum Asia and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Platinum Asia 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 Platinum Asia and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Asia Investments and Aneka Tambang Tbk, you can compare the effects of market volatilities on Platinum Asia 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 Platinum Asia with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Aneka Tambang.
Diversification Opportunities for Platinum Asia and Aneka Tambang
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Platinum and Aneka is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments 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 Platinum Asia 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 Platinum Asia Investments 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 Platinum Asia i.e., Platinum Asia and Aneka Tambang go up and down completely randomly.
Pair Corralation between Platinum Asia and Aneka Tambang
Assuming the 90 days trading horizon Platinum Asia Investments is expected to generate 0.7 times more return on investment than Aneka Tambang. However, Platinum Asia Investments is 1.44 times less risky than Aneka Tambang. It trades about 0.08 of its potential returns per unit of risk. Aneka Tambang Tbk is currently generating about -0.28 per unit of risk. If you would invest 101.00 in Platinum Asia Investments on October 13, 2024 and sell it today you would earn a total of 1.00 from holding Platinum Asia Investments or generate 0.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Platinum Asia Investments vs. Aneka Tambang Tbk
Performance |
Timeline |
Platinum Asia Investments |
Aneka Tambang Tbk |
Platinum Asia and Aneka Tambang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Platinum Asia and Aneka Tambang
The main advantage of trading using opposite Platinum Asia and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia 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.Platinum Asia vs. Dexus Convenience Retail | Platinum Asia vs. Cleanaway Waste Management | Platinum Asia vs. Platinum Asset Management | Platinum Asia vs. Kneomedia |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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