Correlation Between Ashmore Asset and Garuda Metalindo
Can any of the company-specific risk be diversified away by investing in both Ashmore Asset and Garuda Metalindo 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 Garuda Metalindo 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 Garuda Metalindo Tbk, you can compare the effects of market volatilities on Ashmore Asset and Garuda Metalindo 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 Garuda Metalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Asset and Garuda Metalindo.
Diversification Opportunities for Ashmore Asset and Garuda Metalindo
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ashmore and Garuda is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Asset Management and Garuda Metalindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garuda Metalindo Tbk 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 Garuda Metalindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garuda Metalindo Tbk has no effect on the direction of Ashmore Asset i.e., Ashmore Asset and Garuda Metalindo go up and down completely randomly.
Pair Corralation between Ashmore Asset and Garuda Metalindo
Assuming the 90 days trading horizon Ashmore Asset is expected to generate 6.88 times less return on investment than Garuda Metalindo. In addition to that, Ashmore Asset is 2.28 times more volatile than Garuda Metalindo Tbk. It trades about 0.01 of its total potential returns per unit of risk. Garuda Metalindo Tbk is currently generating about 0.19 per unit of volatility. If you would invest 97,500 in Garuda Metalindo Tbk on September 4, 2024 and sell it today you would earn a total of 27,000 from holding Garuda Metalindo Tbk or generate 27.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashmore Asset Management vs. Garuda Metalindo Tbk
Performance |
| Timeline |
| Ashmore Asset Management |
| Garuda Metalindo Tbk |
Ashmore Asset and Garuda Metalindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashmore Asset and Garuda Metalindo
The main advantage of trading using opposite Ashmore Asset and Garuda Metalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Asset position performs unexpectedly, Garuda Metalindo 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 Garuda Metalindo will offset losses from the drop in Garuda Metalindo's long position.| Ashmore Asset vs. Bank Amar Indonesia | Ashmore Asset vs. Bhakti Multi Artha | Ashmore Asset vs. Mitra Pinasthika Mustika | Ashmore Asset vs. Jakarta Int Hotels |
| Garuda Metalindo vs. Intanwijaya Internasional Tbk | Garuda Metalindo vs. Champion Pacific Indonesia | Garuda Metalindo vs. Mitra Pinasthika Mustika | Garuda Metalindo 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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