Correlation Between Arita Prima and Ateliers Mecaniques
Can any of the company-specific risk be diversified away by investing in both Arita Prima and Ateliers Mecaniques 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 Arita Prima and Ateliers Mecaniques into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arita Prima Indonesia and Ateliers Mecaniques DIndonesie, you can compare the effects of market volatilities on Arita Prima and Ateliers Mecaniques 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 Arita Prima with a short position of Ateliers Mecaniques. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arita Prima and Ateliers Mecaniques.
Diversification Opportunities for Arita Prima and Ateliers Mecaniques
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Arita and Ateliers is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Arita Prima Indonesia and Ateliers Mecaniques DIndonesie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ateliers Mecaniques and Arita Prima 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 Arita Prima Indonesia are associated (or correlated) with Ateliers Mecaniques. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ateliers Mecaniques has no effect on the direction of Arita Prima i.e., Arita Prima and Ateliers Mecaniques go up and down completely randomly.
Pair Corralation between Arita Prima and Ateliers Mecaniques
Assuming the 90 days trading horizon Arita Prima Indonesia is expected to generate 0.99 times more return on investment than Ateliers Mecaniques. However, Arita Prima Indonesia is 1.01 times less risky than Ateliers Mecaniques. It trades about 0.01 of its potential returns per unit of risk. Ateliers Mecaniques DIndonesie is currently generating about 0.01 per unit of risk. If you would invest 17,700 in Arita Prima Indonesia on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Arita Prima Indonesia or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arita Prima Indonesia vs. Ateliers Mecaniques DIndonesie
Performance |
| Timeline |
| Arita Prima Indonesia |
| Ateliers Mecaniques |
Arita Prima and Ateliers Mecaniques Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arita Prima and Ateliers Mecaniques
The main advantage of trading using opposite Arita Prima and Ateliers Mecaniques positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arita Prima position performs unexpectedly, Ateliers Mecaniques 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 Ateliers Mecaniques will offset losses from the drop in Ateliers Mecaniques' long position.| Arita Prima vs. Bintang Mitra Semestaraya | Arita Prima vs. Alkindo Naratama Tbk | Arita Prima vs. Bayu Buana Tbk | Arita Prima vs. Austindo Nusantara Jaya |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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