Correlation Between Asiaplast Industries and Asahimas Flat
Can any of the company-specific risk be diversified away by investing in both Asiaplast Industries and Asahimas Flat 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 Asiaplast Industries and Asahimas Flat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiaplast Industries Tbk and Asahimas Flat Glass, you can compare the effects of market volatilities on Asiaplast Industries and Asahimas Flat 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 Asiaplast Industries with a short position of Asahimas Flat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiaplast Industries and Asahimas Flat.
Diversification Opportunities for Asiaplast Industries and Asahimas Flat
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asiaplast and Asahimas is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Asiaplast Industries Tbk and Asahimas Flat Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahimas Flat Glass and Asiaplast Industries 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 Asiaplast Industries Tbk are associated (or correlated) with Asahimas Flat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahimas Flat Glass has no effect on the direction of Asiaplast Industries i.e., Asiaplast Industries and Asahimas Flat go up and down completely randomly.
Pair Corralation between Asiaplast Industries and Asahimas Flat
Assuming the 90 days trading horizon Asiaplast Industries Tbk is expected to under-perform the Asahimas Flat. In addition to that, Asiaplast Industries is 8.76 times more volatile than Asahimas Flat Glass. It trades about -0.14 of its total potential returns per unit of risk. Asahimas Flat Glass is currently generating about -0.12 per unit of volatility. If you would invest 470,000 in Asahimas Flat Glass on August 29, 2024 and sell it today you would lose (5,000) from holding Asahimas Flat Glass or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiaplast Industries Tbk vs. Asahimas Flat Glass
Performance |
| Timeline |
| Asiaplast Industries Tbk |
| Asahimas Flat Glass |
Asiaplast Industries and Asahimas Flat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiaplast Industries and Asahimas Flat
The main advantage of trading using opposite Asiaplast Industries and Asahimas Flat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiaplast Industries position performs unexpectedly, Asahimas Flat 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 Asahimas Flat will offset losses from the drop in Asahimas Flat's long position.| Asiaplast Industries vs. Argha Karya Prima | Asiaplast Industries vs. Alumindo Light Metal | Asiaplast Industries vs. Anugerah Kagum Karya | Asiaplast Industries vs. Asahimas Flat Glass |
| Asahimas Flat vs. Arwana Citramulia Tbk | Asahimas Flat vs. Asiaplast Industries Tbk | Asahimas Flat vs. Argha Karya Prima | Asahimas Flat vs. Astra Graphia Tbk |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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