Correlation Between Triputra Agro and Aneka Gas

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

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

Diversification Opportunities for Triputra Agro and Aneka Gas

0.25

Correlation Coefficient

Triputra Agro  Aneka Gas

Modest diversification

The 3 months correlation between Triputra and Aneka is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Triputra Agro Persada 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 Triputra Agro 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 Triputra Agro Persada 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 Triputra Agro i.e., Triputra Agro and Aneka Gas go up and down completely randomly.

Pair Corralation between Triputra Agro and Aneka Gas

Assuming the 90 days trading horizon Triputra Agro Persada is expected to generate 0.63 times more return on investment than Aneka Gas. However, Triputra Agro Persada is 1.59 times less risky than Aneka Gas. It trades about 0.22 of its potential returns per unit of risk. Aneka Gas Industri is currently generating about -0.1 per unit of risk. If you would invest  76,000  in Triputra Agro Persada on December 4, 2024 and sell it today you would earn a total of  7,000  from holding Triputra Agro Persada or generate 9.21% return on investment over 90 days.

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

Triputra Agro Persada  vs.  Aneka Gas Industri

Triputra Agro Persada

Risk-Adjusted Performance

Very Weak

Over the last 90 days Triputra Agro Persada has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Triputra Agro is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Aneka Gas Industri

Risk-Adjusted Performance

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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Triputra Agro and Aneka Gas

The main advantage of trading using opposite Triputra Agro and Aneka Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triputra Agro 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 Triputra Agro Persada 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 Transaction History module to view history of all your transactions and understand their impact on performance.