Correlation Between Trias Sentosa and Aneka Tambang

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Can any of the company-specific risk be diversified away by investing in both Trias Sentosa 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 Trias Sentosa and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trias Sentosa Tbk and Aneka Tambang Persero, you can compare the effects of market volatilities on Trias Sentosa 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 Trias Sentosa with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trias Sentosa and Aneka Tambang.

Diversification Opportunities for Trias Sentosa and Aneka Tambang

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Trias and Aneka is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa Tbk and Aneka Tambang Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aneka Tambang Persero and Trias Sentosa 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 Trias Sentosa Tbk 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 Persero has no effect on the direction of Trias Sentosa i.e., Trias Sentosa and Aneka Tambang go up and down completely randomly.

Pair Corralation between Trias Sentosa and Aneka Tambang

Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to generate 2.05 times more return on investment than Aneka Tambang. However, Trias Sentosa is 2.05 times more volatile than Aneka Tambang Persero. It trades about 0.19 of its potential returns per unit of risk. Aneka Tambang Persero is currently generating about -0.03 per unit of risk. If you would invest  49,000  in Trias Sentosa Tbk on October 17, 2024 and sell it today you would earn a total of  9,000  from holding Trias Sentosa Tbk or generate 18.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Trias Sentosa Tbk  vs.  Aneka Tambang Persero

 Performance 
       Timeline  
Trias Sentosa Tbk 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Trias Sentosa Tbk are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Trias Sentosa disclosed solid returns over the last few months and may actually be approaching a breakup point.
Aneka Tambang Persero 

Risk-Adjusted Performance

0 of 100

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

Trias Sentosa and Aneka Tambang Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Trias Sentosa and Aneka Tambang

The main advantage of trading using opposite Trias Sentosa and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trias Sentosa 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 Trias Sentosa Tbk and Aneka Tambang Persero 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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