Correlation Between Alumindo Light and Alakasa Industrindo
Can any of the company-specific risk be diversified away by investing in both Alumindo Light and Alakasa Industrindo 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 Alakasa Industrindo 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 Alakasa Industrindo Tbk, you can compare the effects of market volatilities on Alumindo Light and Alakasa Industrindo 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 Alakasa Industrindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumindo Light and Alakasa Industrindo.
Diversification Opportunities for Alumindo Light and Alakasa Industrindo
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alumindo and Alakasa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alumindo Light Metal and Alakasa Industrindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alakasa Industrindo Tbk 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 Alakasa Industrindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alakasa Industrindo Tbk has no effect on the direction of Alumindo Light i.e., Alumindo Light and Alakasa Industrindo go up and down completely randomly.
Pair Corralation between Alumindo Light and Alakasa Industrindo
Assuming the 90 days trading horizon Alumindo Light Metal is expected to under-perform the Alakasa Industrindo. But the stock apears to be less risky and, when comparing its historical volatility, Alumindo Light Metal is 1.48 times less risky than Alakasa Industrindo. The stock trades about -0.05 of its potential returns per unit of risk. The Alakasa Industrindo Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 41,200 in Alakasa Industrindo Tbk on November 5, 2024 and sell it today you would lose (6,800) from holding Alakasa Industrindo Tbk or give up 16.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.36% |
| Values | Daily Returns |
Alumindo Light Metal vs. Alakasa Industrindo Tbk
Performance |
| Timeline |
| Alumindo Light Metal |
| Alakasa Industrindo Tbk |
Alumindo Light and Alakasa Industrindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumindo Light and Alakasa Industrindo
The main advantage of trading using opposite Alumindo Light and Alakasa Industrindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumindo Light position performs unexpectedly, Alakasa Industrindo 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 Alakasa Industrindo will offset losses from the drop in Alakasa Industrindo'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 |
| Alakasa Industrindo vs. Argha Karya Prima | Alakasa Industrindo vs. Alumindo Light Metal | Alakasa Industrindo vs. Asiaplast Industries Tbk | Alakasa Industrindo vs. Akbar Indomakmur Stimec |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |