Correlation Between Indosat Tbk and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Ace Hardware 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 Indosat Tbk and Ace Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Ace Hardware Indonesia, you can compare the effects of market volatilities on Indosat Tbk and Ace Hardware 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 Indosat Tbk with a short position of Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Ace Hardware.
Diversification Opportunities for Indosat Tbk and Ace Hardware
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indosat and Ace is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Ace Hardware Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Hardware Indonesia and Indosat Tbk 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 Indosat Tbk are associated (or correlated) with Ace Hardware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Hardware Indonesia has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Ace Hardware go up and down completely randomly.
Pair Corralation between Indosat Tbk and Ace Hardware
Assuming the 90 days trading horizon Indosat Tbk is expected to under-perform the Ace Hardware. In addition to that, Indosat Tbk is 1.49 times more volatile than Ace Hardware Indonesia. It trades about 0.0 of its total potential returns per unit of risk. Ace Hardware Indonesia is currently generating about 0.06 per unit of volatility. If you would invest 40,326 in Ace Hardware Indonesia on September 2, 2024 and sell it today you would earn a total of 36,674 from holding Ace Hardware Indonesia or generate 90.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. Ace Hardware Indonesia
Performance |
| Timeline |
| Indosat Tbk |
| Ace Hardware Indonesia |
Indosat Tbk and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Ace Hardware
The main advantage of trading using opposite Indosat Tbk and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Ace Hardware 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 Ace Hardware will offset losses from the drop in Ace Hardware's long position.| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
| Ace Hardware vs. Japfa Comfeed Indonesia | Ace Hardware vs. Charoen Pokphand Indonesia | Ace Hardware vs. Erajaya Swasembada Tbk | Ace Hardware vs. Indofood Cbp Sukses |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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