Correlation Between Santana Minerals and Aneka Tambang

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

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

Diversification Opportunities for Santana Minerals and Aneka Tambang

0.36

Correlation Coefficient

Santana Minerals  Aneka Tambang

Weak diversification

The 3 months correlation between Santana and Aneka is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Santana Minerals 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 Santana Minerals 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 Santana Minerals 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 Santana Minerals i.e., Santana Minerals and Aneka Tambang go up and down completely randomly.

Pair Corralation between Santana Minerals and Aneka Tambang

Assuming the 90 days trading horizon Santana Minerals is expected to under-perform the Aneka Tambang. In addition to that, Santana Minerals is 2.72 times more volatile than Aneka Tambang Tbk. It trades about -0.07 of its total potential returns per unit of risk. Aneka Tambang Tbk is currently generating about 0.01 per unit of volatility. If you would invest  90.00  in Aneka Tambang Tbk on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Aneka Tambang Tbk or generate 0.0% return on investment over 90 days.

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

Santana Minerals  vs.  Aneka Tambang Tbk

Santana Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santana Minerals 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 forward 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 Santana Minerals and Aneka Tambang

The main advantage of trading using opposite Santana Minerals and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santana Minerals 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 Santana Minerals 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.