Correlation Between Alumindo Light and Argha Karya
Can any of the company-specific risk be diversified away by investing in both Alumindo Light and Argha Karya 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 Argha Karya 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 Argha Karya Prima, you can compare the effects of market volatilities on Alumindo Light and Argha Karya 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 Argha Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumindo Light and Argha Karya.
Diversification Opportunities for Alumindo Light and Argha Karya
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alumindo and Argha is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alumindo Light Metal and Argha Karya Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argha Karya Prima 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 Argha Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argha Karya Prima has no effect on the direction of Alumindo Light i.e., Alumindo Light and Argha Karya go up and down completely randomly.
Pair Corralation between Alumindo Light and Argha Karya
Assuming the 90 days trading horizon Alumindo Light Metal is expected to generate 0.99 times more return on investment than Argha Karya. However, Alumindo Light Metal is 1.01 times less risky than Argha Karya. It trades about 0.08 of its potential returns per unit of risk. Argha Karya Prima is currently generating about 0.0 per unit of risk. If you would invest 5,700 in Alumindo Light Metal on November 3, 2024 and sell it today you would earn a total of 1,700 from holding Alumindo Light Metal or generate 29.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.17% |
| Values | Daily Returns |
Alumindo Light Metal vs. Argha Karya Prima
Performance |
| Timeline |
| Alumindo Light Metal |
| Argha Karya Prima |
Alumindo Light and Argha Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumindo Light and Argha Karya
The main advantage of trading using opposite Alumindo Light and Argha Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumindo Light position performs unexpectedly, Argha Karya 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 Argha Karya will offset losses from the drop in Argha Karya's long position.| Alumindo Light vs. Asiaplast Industries Tbk | Alumindo Light vs. Argha Karya Prima | Alumindo Light vs. Indal Aluminium Industry | Alumindo Light vs. Alakasa Industrindo Tbk |
| Argha Karya vs. Asiaplast Industries Tbk | Argha Karya vs. Alumindo Light Metal | Argha Karya vs. Berlina Tbk | Argha Karya vs. Anugerah Kagum Karya |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |