Correlation Between Asiaplast Industries and Arwana Citramulia
Can any of the company-specific risk be diversified away by investing in both Asiaplast Industries and Arwana Citramulia 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 Arwana Citramulia 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 Arwana Citramulia Tbk, you can compare the effects of market volatilities on Asiaplast Industries and Arwana Citramulia 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 Arwana Citramulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiaplast Industries and Arwana Citramulia.
Diversification Opportunities for Asiaplast Industries and Arwana Citramulia
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asiaplast and Arwana is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Asiaplast Industries Tbk and Arwana Citramulia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arwana Citramulia Tbk 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 Arwana Citramulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arwana Citramulia Tbk has no effect on the direction of Asiaplast Industries i.e., Asiaplast Industries and Arwana Citramulia go up and down completely randomly.
Pair Corralation between Asiaplast Industries and Arwana Citramulia
Assuming the 90 days trading horizon Asiaplast Industries Tbk is expected to generate 2.43 times more return on investment than Arwana Citramulia. However, Asiaplast Industries is 2.43 times more volatile than Arwana Citramulia Tbk. It trades about 0.05 of its potential returns per unit of risk. Arwana Citramulia Tbk is currently generating about 0.06 per unit of risk. If you would invest 47,354 in Asiaplast Industries Tbk on September 2, 2024 and sell it today you would earn a total of 12,646 from holding Asiaplast Industries Tbk or generate 26.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiaplast Industries Tbk vs. Arwana Citramulia Tbk
Performance |
| Timeline |
| Asiaplast Industries Tbk |
| Arwana Citramulia Tbk |
Asiaplast Industries and Arwana Citramulia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiaplast Industries and Arwana Citramulia
The main advantage of trading using opposite Asiaplast Industries and Arwana Citramulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiaplast Industries position performs unexpectedly, Arwana Citramulia 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 Arwana Citramulia will offset losses from the drop in Arwana Citramulia'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 |
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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 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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