Correlation Between PT Ace and FANDIFI TECHNOLOGY

Can any of the company-specific risk be diversified away by investing in both PT Ace and FANDIFI TECHNOLOGY 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 Ace and FANDIFI TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Ace Hardware and FANDIFI TECHNOLOGY P, you can compare the effects of market volatilities on PT Ace and FANDIFI TECHNOLOGY 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 Ace with a short position of FANDIFI TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Ace and FANDIFI TECHNOLOGY.

Diversification Opportunities for PT Ace and FANDIFI TECHNOLOGY

0.0

Correlation Coefficient

PT Ace  FANDIFI TECHNOLOGY

Pay attention - limited upside

The 3 months correlation between 4AH1 and FANDIFI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Ace Hardware and FANDIFI TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANDIFI TECHNOLOGY and PT Ace 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 Ace Hardware are associated (or correlated) with FANDIFI TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANDIFI TECHNOLOGY has no effect on the direction of PT Ace i.e., PT Ace and FANDIFI TECHNOLOGY go up and down completely randomly.

Pair Corralation between PT Ace and FANDIFI TECHNOLOGY

If you would invest  4.30  in PT Ace Hardware on December 28, 2024 and sell it today you would lose (1.30) from holding PT Ace Hardware or give up 30.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

PT Ace Hardware  vs.  FANDIFI TECHNOLOGY P

PT Ace Hardware

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Ace Hardware are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, PT Ace reported solid returns over the last few months and may actually be approaching a breakup point.

FANDIFI TECHNOLOGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days FANDIFI TECHNOLOGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FANDIFI TECHNOLOGY is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Ace and FANDIFI TECHNOLOGY

The main advantage of trading using opposite PT Ace and FANDIFI TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Ace position performs unexpectedly, FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY will offset losses from the drop in FANDIFI TECHNOLOGY's long position.

The idea behind PT Ace Hardware and FANDIFI TECHNOLOGY P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.