Correlation Between Indo Acidatama and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both Indo Acidatama 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 Indo Acidatama and Ace Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Acidatama Tbk and Ace Hardware Indonesia, you can compare the effects of market volatilities on Indo Acidatama 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 Indo Acidatama with a short position of Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Acidatama and Ace Hardware.
Diversification Opportunities for Indo Acidatama and Ace Hardware
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indo and Ace is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Indo Acidatama 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 Indo Acidatama 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 Indo Acidatama 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 Indo Acidatama i.e., Indo Acidatama and Ace Hardware go up and down completely randomly.
Pair Corralation between Indo Acidatama and Ace Hardware
Assuming the 90 days trading horizon Indo Acidatama Tbk is expected to generate 0.51 times more return on investment than Ace Hardware. However, Indo Acidatama Tbk is 1.95 times less risky than Ace Hardware. It trades about 0.01 of its potential returns per unit of risk. Ace Hardware Indonesia is currently generating about -0.32 per unit of risk. If you would invest 5,100 in Indo Acidatama Tbk on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Indo Acidatama Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Acidatama Tbk vs. Ace Hardware Indonesia
Performance |
| Timeline |
| Indo Acidatama Tbk |
| Ace Hardware Indonesia |
Indo Acidatama and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Acidatama and Ace Hardware
The main advantage of trading using opposite Indo Acidatama and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Acidatama 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.| Indo Acidatama vs. PT Sreeya Sewu | Indo Acidatama vs. Trias Sentosa Tbk | Indo Acidatama vs. Slj Global Tbk | Indo Acidatama vs. Suparma Tbk |
| Ace Hardware vs. Pembangunan Jaya Ancol | Ace Hardware vs. Panorama Sentrawisata Tbk | Ace Hardware vs. Millennium Pharmacon International | Ace Hardware vs. Tempo Inti Media |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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