Correlation Between Aneka Tambang and Wellnex Life
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Wellnex Life 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 Wellnex Life 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 Wellnex Life, you can compare the effects of market volatilities on Aneka Tambang and Wellnex Life 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 Wellnex Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Wellnex Life.
Diversification Opportunities for Aneka Tambang and Wellnex Life
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aneka and Wellnex is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Wellnex Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wellnex Life 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 Wellnex Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wellnex Life has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Wellnex Life go up and down completely randomly.
Pair Corralation between Aneka Tambang and Wellnex Life
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to generate 0.28 times more return on investment than Wellnex Life. However, Aneka Tambang Tbk is 3.53 times less risky than Wellnex Life. It trades about -0.05 of its potential returns per unit of risk. Wellnex Life is currently generating about -0.04 per unit of risk. If you would invest 103.00 in Aneka Tambang Tbk on September 16, 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 | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aneka Tambang Tbk vs. Wellnex Life
Performance |
Timeline |
Aneka Tambang Tbk |
Wellnex Life |
Aneka Tambang and Wellnex Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aneka Tambang and Wellnex Life
The main advantage of trading using opposite Aneka Tambang and Wellnex Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang position performs unexpectedly, Wellnex Life 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 Wellnex Life will offset losses from the drop in Wellnex Life'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 |
Wellnex Life vs. Aneka Tambang Tbk | Wellnex Life vs. Macquarie Group | Wellnex Life vs. Macquarie Group Ltd | Wellnex Life vs. Challenger |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |