Correlation Between Smartfren Telecom and Ashmore Asset
Can any of the company-specific risk be diversified away by investing in both Smartfren Telecom and Ashmore Asset 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 Smartfren Telecom and Ashmore Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smartfren Telecom Tbk and Ashmore Asset Management, you can compare the effects of market volatilities on Smartfren Telecom and Ashmore Asset 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 Smartfren Telecom with a short position of Ashmore Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartfren Telecom and Ashmore Asset.
Diversification Opportunities for Smartfren Telecom and Ashmore Asset
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smartfren and Ashmore is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Smartfren Telecom Tbk and Ashmore Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Asset Management and Smartfren Telecom 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 Smartfren Telecom Tbk are associated (or correlated) with Ashmore Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Asset Management has no effect on the direction of Smartfren Telecom i.e., Smartfren Telecom and Ashmore Asset go up and down completely randomly.
Pair Corralation between Smartfren Telecom and Ashmore Asset
Assuming the 90 days trading horizon Smartfren Telecom Tbk is expected to generate 1.09 times more return on investment than Ashmore Asset. However, Smartfren Telecom is 1.09 times more volatile than Ashmore Asset Management. It trades about -0.23 of its potential returns per unit of risk. Ashmore Asset Management is currently generating about -0.29 per unit of risk. If you would invest 2,800 in Smartfren Telecom Tbk on September 2, 2024 and sell it today you would lose (300.00) from holding Smartfren Telecom Tbk or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartfren Telecom Tbk vs. Ashmore Asset Management
Performance |
| Timeline |
| Smartfren Telecom Tbk |
| Ashmore Asset Management |
Smartfren Telecom and Ashmore Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartfren Telecom and Ashmore Asset
The main advantage of trading using opposite Smartfren Telecom and Ashmore Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartfren Telecom position performs unexpectedly, Ashmore Asset 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 Ashmore Asset will offset losses from the drop in Ashmore Asset's long position.| Smartfren Telecom vs. Indosat Tbk | Smartfren Telecom vs. XL Axiata Tbk | Smartfren Telecom vs. Energi Mega Persada | Smartfren Telecom vs. Bakrie Brothers Tbk |
| Ashmore Asset vs. Bank Amar Indonesia | Ashmore Asset vs. Bank Mestika Dharma | Ashmore Asset vs. Integra Indocabinet Tbk | Ashmore Asset vs. Multistrada Arah Sarana |
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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