Correlation Between Ashmore Asset and Weha Transportasi
Can any of the company-specific risk be diversified away by investing in both Ashmore Asset and Weha Transportasi 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 Ashmore Asset and Weha Transportasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashmore Asset Management and Weha Transportasi Indonesia, you can compare the effects of market volatilities on Ashmore Asset and Weha Transportasi 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 Ashmore Asset with a short position of Weha Transportasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Asset and Weha Transportasi.
Diversification Opportunities for Ashmore Asset and Weha Transportasi
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ashmore and Weha is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Asset Management and Weha Transportasi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weha Transportasi and Ashmore Asset 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 Ashmore Asset Management are associated (or correlated) with Weha Transportasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weha Transportasi has no effect on the direction of Ashmore Asset i.e., Ashmore Asset and Weha Transportasi go up and down completely randomly.
Pair Corralation between Ashmore Asset and Weha Transportasi
Assuming the 90 days trading horizon Ashmore Asset Management is expected to generate 1.62 times more return on investment than Weha Transportasi. However, Ashmore Asset is 1.62 times more volatile than Weha Transportasi Indonesia. It trades about -0.11 of its potential returns per unit of risk. Weha Transportasi Indonesia is currently generating about -0.27 per unit of risk. If you would invest 65,534 in Ashmore Asset Management on December 1, 2024 and sell it today you would lose (11,034) from holding Ashmore Asset Management or give up 16.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ashmore Asset Management vs. Weha Transportasi Indonesia
Performance |
Timeline |
Ashmore Asset Management |
Weha Transportasi |
Ashmore Asset and Weha Transportasi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ashmore Asset and Weha Transportasi
The main advantage of trading using opposite Ashmore Asset and Weha Transportasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashmore Asset position performs unexpectedly, Weha Transportasi 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 Weha Transportasi will offset losses from the drop in Weha Transportasi's long position.Ashmore Asset vs. Bank Amar Indonesia | Ashmore Asset vs. Bhakti Multi Artha | Ashmore Asset vs. Mahaka Radio Integra | Ashmore Asset vs. Ateliers Mecaniques DIndonesie |
Weha Transportasi vs. PT Temas Tbk | Weha Transportasi vs. Dosni Roha Indonesia | Weha Transportasi vs. Rig Tenders Tbk | Weha Transportasi vs. Samudera Indonesia Tbk |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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