Correlation Between Kresna Graha and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both Kresna Graha 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 Kresna Graha and Ace Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kresna Graha Investama and Ace Hardware Indonesia, you can compare the effects of market volatilities on Kresna Graha 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 Kresna Graha with a short position of Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kresna Graha and Ace Hardware.
Diversification Opportunities for Kresna Graha and Ace Hardware
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kresna and Ace is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kresna Graha Investama 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 Kresna Graha 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 Kresna Graha Investama 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 Kresna Graha i.e., Kresna Graha and Ace Hardware go up and down completely randomly.
Pair Corralation between Kresna Graha and Ace Hardware
Assuming the 90 days trading horizon Kresna Graha Investama is expected to generate 4.46 times more return on investment than Ace Hardware. However, Kresna Graha is 4.46 times more volatile than Ace Hardware Indonesia. It trades about 0.03 of its potential returns per unit of risk. Ace Hardware Indonesia is currently generating about -0.01 per unit of risk. If you would invest 800.00 in Kresna Graha Investama on September 3, 2024 and sell it today you would lose (200.00) from holding Kresna Graha Investama or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kresna Graha Investama vs. Ace Hardware Indonesia
Performance |
| Timeline |
| Kresna Graha Investama |
| Ace Hardware Indonesia |
Kresna Graha and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kresna Graha and Ace Hardware
The main advantage of trading using opposite Kresna Graha and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kresna Graha 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.| Kresna Graha vs. Mnc Land Tbk | Kresna Graha vs. Nusantara Infrastructure Tbk | Kresna Graha vs. Lenox Pasifik Investama | Kresna Graha vs. Mandala Multifinance Tbk |
| Ace Hardware vs. Mitra Pinasthika Mustika | Ace Hardware vs. Jakarta Int Hotels | Ace Hardware vs. Asuransi Harta Aman | Ace Hardware vs. Indosterling Technomedia 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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