Correlation Between Alumindo Light and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both Alumindo Light and Ace Hardware 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 Alumindo Light and Ace Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alumindo Light Metal and Ace Hardware Indonesia, you can compare the effects of market volatilities on Alumindo Light and Ace Hardware 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 Alumindo Light with a short position of Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumindo Light and Ace Hardware.
Diversification Opportunities for Alumindo Light and Ace Hardware
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alumindo and Ace is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alumindo Light Metal and Ace Hardware Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Hardware Indonesia and Alumindo Light 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 Alumindo Light Metal are associated (or correlated) with Ace Hardware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Hardware Indonesia has no effect on the direction of Alumindo Light i.e., Alumindo Light and Ace Hardware go up and down completely randomly.
Pair Corralation between Alumindo Light and Ace Hardware
If you would invest 7,400 in Alumindo Light Metal on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Alumindo Light Metal or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Alumindo Light Metal vs. Ace Hardware Indonesia
Performance |
| Timeline |
| Alumindo Light Metal |
| Ace Hardware Indonesia |
Alumindo Light and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumindo Light and Ace Hardware
The main advantage of trading using opposite Alumindo Light and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumindo Light position performs unexpectedly, Ace Hardware 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 Ace Hardware will offset losses from the drop in Ace Hardware's long position.| Alumindo Light vs. Perusahaan Gas Negara | Alumindo Light vs. Telkom Indonesia Tbk | Alumindo Light vs. Mitra Pinasthika Mustika | Alumindo Light vs. Jakarta Int Hotels |
| Ace Hardware vs. Japfa Comfeed Indonesia | Ace Hardware vs. Charoen Pokphand Indonesia | Ace Hardware vs. Erajaya Swasembada Tbk | Ace Hardware vs. Indofood Cbp Sukses |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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