Correlation Between Aneka Tambang and Energi Mega

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

Diversification Opportunities for Aneka Tambang and Energi Mega

0.57

Correlation Coefficient

Aneka Tambang  Energi Mega

Very weak diversification

The 3 months correlation between Aneka and Energi is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Persero and Energi Mega Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energi Mega Persada 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 Energi Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energi Mega Persada has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Energi Mega go up and down completely randomly.

Pair Corralation between Aneka Tambang and Energi Mega

Assuming the 90 days trading horizon Aneka Tambang is expected to generate 2.57 times less return on investment than Energi Mega. But when comparing it to its historical volatility, Aneka Tambang Persero is 1.25 times less risky than Energi Mega. It trades about 0.18 of its potential returns per unit of risk. Energi Mega Persada is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  18,900  in Energi Mega Persada on April 25, 2025 and sell it today you would earn a total of  29,700  from holding Energi Mega Persada or generate 157.14% return on investment over 90 days.

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

Aneka Tambang Persero  vs.  Energi Mega Persada

Aneka Tambang Persero

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aneka Tambang Persero are ranked lower than 14 (%) 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.

Energi Mega Persada

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Energi Mega Persada are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Energi Mega disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aneka Tambang and Energi Mega

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

The idea behind Aneka Tambang Persero and Energi Mega Persada 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.