Correlation Between Aneka Tambang and Invion
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Invion 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 Invion 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 Invion, you can compare the effects of market volatilities on Aneka Tambang and Invion 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 Invion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Invion.
Diversification Opportunities for Aneka Tambang and Invion
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aneka and Invion is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Invion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invion 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 Invion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invion has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Invion go up and down completely randomly.
Pair Corralation between Aneka Tambang and Invion
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Invion. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 9.43 times less risky than Invion. The stock trades about -0.05 of its potential returns per unit of risk. The Invion is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Invion on September 23, 2024 and sell it today you would lose (4.00) from holding Invion or give up 13.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aneka Tambang Tbk vs. Invion
Performance |
Timeline |
Aneka Tambang Tbk |
Invion |
Aneka Tambang and Invion Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aneka Tambang and Invion
The main advantage of trading using opposite Aneka Tambang and Invion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Invion 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 Invion will offset losses from the drop in Invion's long position.Aneka Tambang vs. Northern Star Resources | Aneka Tambang vs. Evolution Mining | Aneka Tambang vs. Bluescope Steel | Aneka Tambang vs. Sandfire Resources NL |
Invion vs. Aneka Tambang Tbk | Invion vs. BHP Group Limited | Invion vs. Rio Tinto | Invion vs. Macquarie Group Ltd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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