Correlation Between Ateliers Mecaniques and Arita Prima
Can any of the company-specific risk be diversified away by investing in both Ateliers Mecaniques and Arita Prima 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 Ateliers Mecaniques and Arita Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ateliers Mecaniques DIndonesie and Arita Prima Indonesia, you can compare the effects of market volatilities on Ateliers Mecaniques and Arita Prima 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 Ateliers Mecaniques with a short position of Arita Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ateliers Mecaniques and Arita Prima.
Diversification Opportunities for Ateliers Mecaniques and Arita Prima
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ateliers and Arita is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ateliers Mecaniques DIndonesie and Arita Prima Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arita Prima Indonesia and Ateliers Mecaniques 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 Ateliers Mecaniques DIndonesie are associated (or correlated) with Arita Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arita Prima Indonesia has no effect on the direction of Ateliers Mecaniques i.e., Ateliers Mecaniques and Arita Prima go up and down completely randomly.
Pair Corralation between Ateliers Mecaniques and Arita Prima
Assuming the 90 days trading horizon Ateliers Mecaniques DIndonesie is expected to generate 2.87 times more return on investment than Arita Prima. However, Ateliers Mecaniques is 2.87 times more volatile than Arita Prima Indonesia. It trades about 0.03 of its potential returns per unit of risk. Arita Prima Indonesia is currently generating about -0.01 per unit of risk. If you would invest 11,095 in Ateliers Mecaniques DIndonesie on September 3, 2024 and sell it today you would earn a total of 3,305 from holding Ateliers Mecaniques DIndonesie or generate 29.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ateliers Mecaniques DIndonesie vs. Arita Prima Indonesia
Performance |
| Timeline |
| Ateliers Mecaniques |
| Arita Prima Indonesia |
Ateliers Mecaniques and Arita Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ateliers Mecaniques and Arita Prima
The main advantage of trading using opposite Ateliers Mecaniques and Arita Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ateliers Mecaniques position performs unexpectedly, Arita Prima 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 Arita Prima will offset losses from the drop in Arita Prima's long position.| Ateliers Mecaniques vs. Arita Prima Indonesia | Ateliers Mecaniques vs. Betonjaya Manunggal Tbk | Ateliers Mecaniques vs. Alakasa Industrindo Tbk | Ateliers Mecaniques vs. Alkindo Naratama Tbk |
| Arita Prima vs. Intanwijaya Internasional Tbk | Arita Prima vs. Champion Pacific Indonesia | Arita Prima vs. Mitra Pinasthika Mustika | Arita Prima vs. Jakarta Int Hotels |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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