Correlation Between Chandra Asri and Ashmore Asset
Can any of the company-specific risk be diversified away by investing in both Chandra Asri 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 Chandra Asri and Ashmore Asset 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 Ashmore Asset Management, you can compare the effects of market volatilities on Chandra Asri 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 Chandra Asri with a short position of Ashmore Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chandra Asri and Ashmore Asset.
Diversification Opportunities for Chandra Asri and Ashmore Asset
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chandra and Ashmore is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Chandra Asri Petrochemical 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 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 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 Chandra Asri i.e., Chandra Asri and Ashmore Asset go up and down completely randomly.
Pair Corralation between Chandra Asri and Ashmore Asset
Assuming the 90 days trading horizon Chandra Asri Petrochemical is expected to under-perform the Ashmore Asset. But the stock apears to be less risky and, when comparing its historical volatility, Chandra Asri Petrochemical is 1.0 times less risky than Ashmore Asset. The stock trades about -0.41 of its potential returns per unit of risk. The Ashmore Asset Management is currently generating about -0.27 of returns per unit of risk over similar time horizon. If you would invest 89,981 in Ashmore Asset Management on August 24, 2024 and sell it today you would lose (18,481) from holding Ashmore Asset Management or give up 20.54% 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. Ashmore Asset Management
Performance |
| Timeline |
| Chandra Asri Petroch |
| Ashmore Asset Management |
Chandra Asri and Ashmore Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chandra Asri and Ashmore Asset
The main advantage of trading using opposite Chandra Asri and Ashmore Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chandra Asri 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.| Chandra Asri vs. Barito Pacific Tbk | Chandra Asri vs. Pabrik Kertas Tjiwi | Chandra Asri vs. Charoen Pokphand Indonesia | Chandra Asri vs. Indah Kiat Pulp |
| Ashmore Asset vs. Bank Amar Indonesia | Ashmore Asset vs. Bhakti Multi Artha | Ashmore Asset vs. Integra Indocabinet Tbk | Ashmore Asset vs. Multistrada Arah Sarana |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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