Correlation Between Aneka Tambang and Trinitan Metals

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

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

Diversification Opportunities for Aneka Tambang and Trinitan Metals

0.0

Correlation Coefficient

Aneka Tambang  Trinitan Metals

Pay attention - limited upside

The 3 months correlation between Aneka and Trinitan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Persero and Trinitan Metals and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinitan Metals and Aneka Tambang 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 Aneka Tambang Persero are associated (or correlated) with Trinitan Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinitan Metals has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Trinitan Metals go up and down completely randomly.

Pair Corralation between Aneka Tambang and Trinitan Metals

If you would invest  138,000  in Aneka Tambang Persero on September 14, 2024 and sell it today you would earn a total of  23,000  from holding Aneka Tambang Persero or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aneka Tambang Persero  vs.  Trinitan Metals and

Aneka Tambang Persero

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aneka Tambang Persero are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Aneka Tambang disclosed solid returns over the last few months and may actually be approaching a breakup point.

Trinitan Metals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aneka Tambang and Trinitan Metals

The main advantage of trading using opposite Aneka Tambang and Trinitan Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Trinitan Metals 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 Trinitan Metals will offset losses from the drop in Trinitan Metals' long position.

The idea behind Aneka Tambang Persero and Trinitan Metals and 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.