Correlation Between PT Boston and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both PT Boston 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 PT Boston and Ace Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Boston Furniture and Ace Hardware Indonesia, you can compare the effects of market volatilities on PT Boston 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 PT Boston with a short position of Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Boston and Ace Hardware.
Diversification Opportunities for PT Boston and Ace Hardware
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SOFA and Ace is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding PT Boston Furniture 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 PT Boston 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 PT Boston Furniture 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 PT Boston i.e., PT Boston and Ace Hardware go up and down completely randomly.
Pair Corralation between PT Boston and Ace Hardware
Assuming the 90 days trading horizon PT Boston Furniture is expected to generate 2.12 times more return on investment than Ace Hardware. However, PT Boston is 2.12 times more volatile than Ace Hardware Indonesia. It trades about 0.71 of its potential returns per unit of risk. Ace Hardware Indonesia is currently generating about -0.34 per unit of risk. If you would invest 1,900 in PT Boston Furniture on September 2, 2024 and sell it today you would earn a total of 1,700 from holding PT Boston Furniture or generate 89.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Boston Furniture vs. Ace Hardware Indonesia
Performance |
| Timeline |
| PT Boston Furniture |
| Ace Hardware Indonesia |
PT Boston and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Boston and Ace Hardware
The main advantage of trading using opposite PT Boston and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Boston 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.| PT Boston vs. Pt Pradiksi Gunatama | PT Boston vs. Sunindo Adipersada Tbk | PT Boston vs. Planet Properindo Jaya | PT Boston vs. Pt Pakuan Tbk |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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