Correlation Between Leyand International and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both Leyand International 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 Leyand International and Ace Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leyand International Tbk and Ace Hardware Indonesia, you can compare the effects of market volatilities on Leyand International 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 Leyand International with a short position of Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leyand International and Ace Hardware.
Diversification Opportunities for Leyand International and Ace Hardware
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leyand and Ace is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Leyand International 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 Leyand International 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 Leyand International 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 Leyand International i.e., Leyand International and Ace Hardware go up and down completely randomly.
Pair Corralation between Leyand International and Ace Hardware
Assuming the 90 days trading horizon Leyand International Tbk is expected to generate 2.93 times more return on investment than Ace Hardware. However, Leyand International is 2.93 times more volatile than Ace Hardware Indonesia. It trades about 0.15 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 1,900 in Leyand International Tbk on November 3, 2024 and sell it today you would earn a total of 300.00 from holding Leyand International Tbk or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leyand International Tbk vs. Ace Hardware Indonesia
Performance |
| Timeline |
| Leyand International Tbk |
| Ace Hardware Indonesia |
Leyand International and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leyand International and Ace Hardware
The main advantage of trading using opposite Leyand International and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leyand International 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.| Leyand International vs. Alumindo Light Metal | Leyand International vs. PT Carsurin Tbk | Leyand International vs. Bekasi Fajar Industrial | Leyand International vs. PT UBC Medical |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |