Correlation Between Ace Hardware and Alumindo Light
Can any of the company-specific risk be diversified away by investing in both Ace Hardware and Alumindo Light 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 Ace Hardware and Alumindo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ace Hardware Indonesia and Alumindo Light Metal, you can compare the effects of market volatilities on Ace Hardware and Alumindo Light 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 Ace Hardware with a short position of Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ace Hardware and Alumindo Light.
Diversification Opportunities for Ace Hardware and Alumindo Light
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ace and Alumindo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ace Hardware Indonesia and Alumindo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumindo Light Metal and Ace Hardware 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 Ace Hardware Indonesia are associated (or correlated) with Alumindo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumindo Light Metal has no effect on the direction of Ace Hardware i.e., Ace Hardware and Alumindo Light go up and down completely randomly.
Pair Corralation between Ace Hardware and Alumindo Light
Assuming the 90 days trading horizon Ace Hardware Indonesia is expected to generate 0.68 times more return on investment than Alumindo Light. However, Ace Hardware Indonesia is 1.48 times less risky than Alumindo Light. It trades about 0.05 of its potential returns per unit of risk. Alumindo Light Metal is currently generating about -0.05 per unit of risk. If you would invest 45,825 in Ace Hardware Indonesia on November 28, 2024 and sell it today you would earn a total of 24,675 from holding Ace Hardware Indonesia or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ace Hardware Indonesia vs. Alumindo Light Metal
Performance |
| Timeline |
| Ace Hardware Indonesia |
| Alumindo Light Metal |
Ace Hardware and Alumindo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ace Hardware and Alumindo Light
The main advantage of trading using opposite Ace Hardware and Alumindo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ace Hardware position performs unexpectedly, Alumindo Light 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 Alumindo Light will offset losses from the drop in Alumindo Light's long position.| Ace Hardware vs. Japfa Comfeed Indonesia | Ace Hardware vs. Charoen Pokphand Indonesia | Ace Hardware vs. Erajaya Swasembada Tbk | Ace Hardware vs. Indofood Cbp Sukses |
| Alumindo Light vs. Asiaplast Industries Tbk | Alumindo Light vs. Argha Karya Prima | Alumindo Light vs. Indal Aluminium Industry | Alumindo Light vs. Alakasa Industrindo Tbk |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |