Correlation Between Asahimas Flat and Emdeki Utama

Can any of the company-specific risk be diversified away by investing in both Asahimas Flat and Emdeki Utama 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 Asahimas Flat and Emdeki Utama into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asahimas Flat Glass and Emdeki Utama Tbk, you can compare the effects of market volatilities on Asahimas Flat and Emdeki Utama 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 Asahimas Flat with a short position of Emdeki Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asahimas Flat and Emdeki Utama.

Diversification Opportunities for Asahimas Flat and Emdeki Utama

0.75

Correlation Coefficient

Asahimas Flat  Emdeki Utama

Poor diversification

The 3 months correlation between Asahimas and Emdeki is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Asahimas Flat Glass and Emdeki Utama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emdeki Utama Tbk and Asahimas Flat 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 Asahimas Flat Glass are associated (or correlated) with Emdeki Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emdeki Utama Tbk has no effect on the direction of Asahimas Flat i.e., Asahimas Flat and Emdeki Utama go up and down completely randomly.

Pair Corralation between Asahimas Flat and Emdeki Utama

Assuming the 90 days trading horizon Asahimas Flat Glass is expected to under-perform the Emdeki Utama. In addition to that, Asahimas Flat is 1.78 times more volatile than Emdeki Utama Tbk. It trades about -0.02 of its total potential returns per unit of risk. Emdeki Utama Tbk is currently generating about 0.02 per unit of volatility. If you would invest  16,663  in Emdeki Utama Tbk on September 12, 2024 and sell it today you would earn a total of  737.00  from holding Emdeki Utama Tbk or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Asahimas Flat Glass  vs.  Emdeki Utama Tbk

Asahimas Flat Glass

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asahimas Flat Glass has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Asahimas Flat is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Emdeki Utama Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emdeki Utama Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Emdeki Utama is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Asahimas Flat and Emdeki Utama

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

The idea behind Asahimas Flat Glass and Emdeki Utama Tbk 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.