Correlation Between Chandra Asri and Ace Hardware
Can any of the company-specific risk be diversified away by investing in both Chandra Asri 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 Chandra Asri and Ace Hardware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chandra Asri Petrochemical and Ace Hardware Indonesia, you can compare the effects of market volatilities on Chandra Asri 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 Chandra Asri with a short position of Ace Hardware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Ace Hardware.
Diversification Opportunities for Chandra Asri and Ace Hardware
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chandra and Ace is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical 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 Chandra Asri 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 Chandra Asri Petrochemical 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 Chandra Asri i.e., Chandra Asri and Ace Hardware go up and down completely randomly.
Pair Corralation between Chandra Asri and Ace Hardware
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Ace Hardware. In addition to that, Chandra Asri is 1.68 times more volatile than Ace Hardware Indonesia. It trades about -0.41 of its total potential returns per unit of risk. Ace Hardware Indonesia is currently generating about -0.3 per unit of volatility. If you would invest 92,500 in Ace Hardware Indonesia on August 24, 2024 and sell it today you would lose (12,500) from holding Ace Hardware Indonesia or give up 13.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chandra Asri Petrochemical vs. Ace Hardware Indonesia
Performance |
| Timeline |
| Chandra Asri Petroch |
| Ace Hardware Indonesia |
Chandra Asri and Ace Hardware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Ace Hardware
The main advantage of trading using opposite Chandra Asri and Ace Hardware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri 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.| Chandra Asri vs. Barito Pacific Tbk | Chandra Asri vs. Pabrik Kertas Tjiwi | Chandra Asri vs. Charoen Pokphand Indonesia | Chandra Asri vs. Indah Kiat Pulp |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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