Correlation Between Alakasa Industrindo and Ateliers Mecaniques
Can any of the company-specific risk be diversified away by investing in both Alakasa Industrindo and Ateliers Mecaniques 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 Alakasa Industrindo and Ateliers Mecaniques into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alakasa Industrindo Tbk and Ateliers Mecaniques DIndonesie, you can compare the effects of market volatilities on Alakasa Industrindo and Ateliers Mecaniques 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 Alakasa Industrindo with a short position of Ateliers Mecaniques. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alakasa Industrindo and Ateliers Mecaniques.
Diversification Opportunities for Alakasa Industrindo and Ateliers Mecaniques
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alakasa and Ateliers is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alakasa Industrindo Tbk and Ateliers Mecaniques DIndonesie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ateliers Mecaniques and Alakasa Industrindo 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 Alakasa Industrindo Tbk are associated (or correlated) with Ateliers Mecaniques. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ateliers Mecaniques has no effect on the direction of Alakasa Industrindo i.e., Alakasa Industrindo and Ateliers Mecaniques go up and down completely randomly.
Pair Corralation between Alakasa Industrindo and Ateliers Mecaniques
Assuming the 90 days trading horizon Alakasa Industrindo Tbk is expected to under-perform the Ateliers Mecaniques. But the stock apears to be less risky and, when comparing its historical volatility, Alakasa Industrindo Tbk is 1.21 times less risky than Ateliers Mecaniques. The stock trades about -0.37 of its potential returns per unit of risk. The Ateliers Mecaniques DIndonesie is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 14,400 in Ateliers Mecaniques DIndonesie on November 29, 2024 and sell it today you would lose (1,100) from holding Ateliers Mecaniques DIndonesie or give up 7.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alakasa Industrindo Tbk vs. Ateliers Mecaniques DIndonesie
Performance |
| Timeline |
| Alakasa Industrindo Tbk |
| Ateliers Mecaniques |
Alakasa Industrindo and Ateliers Mecaniques Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alakasa Industrindo and Ateliers Mecaniques
The main advantage of trading using opposite Alakasa Industrindo and Ateliers Mecaniques positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alakasa Industrindo position performs unexpectedly, Ateliers Mecaniques 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 Ateliers Mecaniques will offset losses from the drop in Ateliers Mecaniques' long position.| Alakasa Industrindo vs. Argha Karya Prima | Alakasa Industrindo vs. Alumindo Light Metal | Alakasa Industrindo vs. Asiaplast Industries Tbk | Alakasa Industrindo vs. Akbar Indomakmur Stimec |
| Ateliers Mecaniques vs. Arita Prima Indonesia | Ateliers Mecaniques vs. Betonjaya Manunggal Tbk | Ateliers Mecaniques vs. Alakasa Industrindo Tbk | Ateliers Mecaniques vs. Alkindo Naratama 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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