Correlation Between Tifa Finance and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both Tifa Finance 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 Tifa Finance and Ace Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tifa Finance Tbk and Ace Hardware Indonesia, you can compare the effects of market volatilities on Tifa Finance 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 Tifa Finance with a short position of Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tifa Finance and Ace Hardware.
Diversification Opportunities for Tifa Finance and Ace Hardware
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tifa and Ace is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tifa Finance 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 Tifa Finance 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 Tifa Finance 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 Tifa Finance i.e., Tifa Finance and Ace Hardware go up and down completely randomly.
Pair Corralation between Tifa Finance and Ace Hardware
Assuming the 90 days trading horizon Tifa Finance Tbk is expected to under-perform the Ace Hardware. But the stock apears to be less risky and, when comparing its historical volatility, Tifa Finance Tbk is 1.19 times less risky than Ace Hardware. The stock trades about -0.01 of its potential returns per unit of risk. The Ace Hardware Indonesia is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 66,793 in Ace Hardware Indonesia on September 2, 2024 and sell it today you would earn a total of 10,207 from holding Ace Hardware Indonesia or generate 15.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tifa Finance Tbk vs. Ace Hardware Indonesia
Performance |
| Timeline |
| Tifa Finance Tbk |
| Ace Hardware Indonesia |
Tifa Finance and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tifa Finance and Ace Hardware
The main advantage of trading using opposite Tifa Finance and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tifa Finance 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.| Tifa Finance vs. Ace Hardware Indonesia | Tifa Finance vs. Merdeka Copper Gold | Tifa Finance vs. Mitra Pinasthika Mustika | Tifa Finance vs. Jakarta Int Hotels |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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