Correlation Between Ashmore Asset and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both Ashmore Asset 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 Ashmore Asset and Ace Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashmore Asset Management and Ace Hardware Indonesia, you can compare the effects of market volatilities on Ashmore Asset 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 Ashmore Asset with a short position of Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Asset and Ace Hardware.
Diversification Opportunities for Ashmore Asset and Ace Hardware
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashmore and Ace is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Asset Management 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 Ashmore Asset 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 Ashmore Asset Management 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 Ashmore Asset i.e., Ashmore Asset and Ace Hardware go up and down completely randomly.
Pair Corralation between Ashmore Asset and Ace Hardware
Assuming the 90 days trading horizon Ashmore Asset Management is expected to under-perform the Ace Hardware. In addition to that, Ashmore Asset is 1.69 times more volatile than Ace Hardware Indonesia. It trades about -0.27 of its total potential returns per unit of risk. Ace Hardware Indonesia is currently generating about -0.3 per unit of volatility. If you would invest 92,500 in Ace Hardware Indonesia on August 24, 2024 and sell it today you would lose (12,500) from holding Ace Hardware Indonesia or give up 13.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Asset Management vs. Ace Hardware Indonesia
Performance |
| Timeline |
| Ashmore Asset Management |
| Ace Hardware Indonesia |
Ashmore Asset and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Asset and Ace Hardware
The main advantage of trading using opposite Ashmore Asset and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Asset 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.| Ashmore Asset vs. Bank Amar Indonesia | Ashmore Asset vs. Bhakti Multi Artha | Ashmore Asset vs. Integra Indocabinet Tbk | Ashmore Asset vs. Multistrada Arah Sarana |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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