Correlation Between Aneka Tambang and GQG Partners

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

By analyzing existing cross correlation between Aneka Tambang Tbk and GQG Partners DRC, you can compare the effects of market volatilities on Aneka Tambang and GQG Partners 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 GQG Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and GQG Partners.

Diversification Opportunities for Aneka Tambang and GQG Partners

0.18

Correlation Coefficient

Aneka Tambang  GQG Partners

Average diversification

The 3 months correlation between Aneka and GQG is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and GQG Partners DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GQG Partners DRC 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 Tbk are associated (or correlated) with GQG Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GQG Partners DRC has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and GQG Partners go up and down completely randomly.

Pair Corralation between Aneka Tambang and GQG Partners

Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.63 times more return on investment than GQG Partners. However, Aneka Tambang Tbk is 1.59 times less risky than GQG Partners. It trades about -0.05 of its potential returns per unit of risk. GQG Partners DRC is currently generating about -0.11 per unit of risk. If you would invest  103.00  in Aneka Tambang Tbk on September 26, 2024 and sell it today you would lose (9.00) from holding Aneka Tambang Tbk or give up 8.74% of portfolio value over 90 days.

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

Aneka Tambang Tbk  vs.  GQG Partners DRC

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.

GQG Partners DRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GQG Partners DRC 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 technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Aneka Tambang and GQG Partners

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

The idea behind Aneka Tambang Tbk and GQG Partners DRC 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.