Correlation Between Aneka Tambang and Regal Funds

Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Regal Funds 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 Regal Funds 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 Regal Funds Management, you can compare the effects of market volatilities on Aneka Tambang and Regal Funds 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 Regal Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Regal Funds.

Diversification Opportunities for Aneka Tambang and Regal Funds

-0.63

Correlation Coefficient

Aneka Tambang  Regal Funds

Excellent diversification

The 3 months correlation between Aneka and Regal is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Regal Funds Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Funds Management 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 Regal Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Funds Management has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Regal Funds go up and down completely randomly.

Pair Corralation between Aneka Tambang and Regal Funds

Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Regal Funds. But the stock apears to be less risky and, when comparing its historical volatility, Aneka Tambang Tbk is 1.32 times less risky than Regal Funds. The stock trades about -0.05 of its potential returns per unit of risk. The Regal Funds Management is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  314.00  in Regal Funds Management on September 27, 2024 and sell it today you would earn a total of  43.00  from holding Regal Funds Management or generate 13.69% return on investment over 90 days.

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

Aneka Tambang Tbk  vs.  Regal Funds Management

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.

Regal Funds Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regal Funds Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Regal Funds is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aneka Tambang and Regal Funds

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

The idea behind Aneka Tambang Tbk and Regal Funds Management 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.