Correlation Between Nanotech Indonesia and Ashmore Asset
Can any of the company-specific risk be diversified away by investing in both Nanotech Indonesia 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 Nanotech Indonesia and Ashmore Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanotech Indonesia Global and Ashmore Asset Management, you can compare the effects of market volatilities on Nanotech Indonesia 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 Nanotech Indonesia with a short position of Ashmore Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanotech Indonesia and Ashmore Asset.
Diversification Opportunities for Nanotech Indonesia and Ashmore Asset
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nanotech and Ashmore is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nanotech Indonesia Global 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 Nanotech Indonesia 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 Nanotech Indonesia Global 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 Nanotech Indonesia i.e., Nanotech Indonesia and Ashmore Asset go up and down completely randomly.
Pair Corralation between Nanotech Indonesia and Ashmore Asset
Assuming the 90 days trading horizon Nanotech Indonesia Global is expected to generate 1.34 times more return on investment than Ashmore Asset. However, Nanotech Indonesia is 1.34 times more volatile than Ashmore Asset Management. It trades about 0.01 of its potential returns per unit of risk. Ashmore Asset Management is currently generating about -0.03 per unit of risk. If you would invest 2,500 in Nanotech Indonesia Global on August 30, 2024 and sell it today you would lose (300.00) from holding Nanotech Indonesia Global or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanotech Indonesia Global vs. Ashmore Asset Management
Performance |
| Timeline |
| Nanotech Indonesia Global |
| Ashmore Asset Management |
Nanotech Indonesia and Ashmore Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanotech Indonesia and Ashmore Asset
The main advantage of trading using opposite Nanotech Indonesia and Ashmore Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanotech Indonesia 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.| Nanotech Indonesia vs. Sumber Tani Agung | Nanotech Indonesia vs. Dayamitra Telekomunikasi PT | Nanotech Indonesia vs. Wir Asia Tbk | Nanotech Indonesia vs. Integra Indocabinet Tbk |
| Ashmore Asset vs. Bank Amar Indonesia | Ashmore Asset vs. Bhakti Multi Artha | Ashmore Asset vs. Mahaka Radio Integra | Ashmore Asset vs. Bank Mestika Dharma |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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