Correlation Between Alumindo Light and Arwana Citramulia
Can any of the company-specific risk be diversified away by investing in both Alumindo Light and Arwana Citramulia 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 Arwana Citramulia 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 Arwana Citramulia Tbk, you can compare the effects of market volatilities on Alumindo Light and Arwana Citramulia 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 Arwana Citramulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumindo Light and Arwana Citramulia.
Diversification Opportunities for Alumindo Light and Arwana Citramulia
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alumindo and Arwana is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alumindo Light Metal and Arwana Citramulia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arwana Citramulia 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 Arwana Citramulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arwana Citramulia Tbk has no effect on the direction of Alumindo Light i.e., Alumindo Light and Arwana Citramulia go up and down completely randomly.
Pair Corralation between Alumindo Light and Arwana Citramulia
Assuming the 90 days trading horizon Alumindo Light Metal is expected to under-perform the Arwana Citramulia. In addition to that, Alumindo Light is 2.89 times more volatile than Arwana Citramulia Tbk. It trades about -0.05 of its total potential returns per unit of risk. Arwana Citramulia Tbk is currently generating about -0.02 per unit of volatility. If you would invest 89,679 in Arwana Citramulia Tbk on August 31, 2024 and sell it today you would lose (15,679) from holding Arwana Citramulia Tbk or give up 17.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Alumindo Light Metal vs. Arwana Citramulia Tbk
Performance |
| Timeline |
| Alumindo Light Metal |
| Arwana Citramulia Tbk |
Alumindo Light and Arwana Citramulia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumindo Light and Arwana Citramulia
The main advantage of trading using opposite Alumindo Light and Arwana Citramulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumindo Light position performs unexpectedly, Arwana Citramulia 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 Arwana Citramulia will offset losses from the drop in Arwana Citramulia'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 |
| Arwana Citramulia vs. Asahimas Flat Glass | Arwana Citramulia vs. Astra Graphia Tbk | Arwana Citramulia vs. Ekadharma International Tbk | Arwana Citramulia vs. Akasha Wira International |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |