Correlation Between Integra Indocabinet and Asahimas Flat

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

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

Diversification Opportunities for Integra Indocabinet and Asahimas Flat

-0.35

Correlation Coefficient

Integra Indocabinet  Asahimas Flat

Very good diversification

The 3 months correlation between Integra and Asahimas is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Asahimas Flat Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahimas Flat Glass and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with Asahimas Flat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahimas Flat Glass has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Asahimas Flat go up and down completely randomly.

Pair Corralation between Integra Indocabinet and Asahimas Flat

Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to under-perform the Asahimas Flat. In addition to that, Integra Indocabinet is 2.5 times more volatile than Asahimas Flat Glass. It trades about -0.14 of its total potential returns per unit of risk. Asahimas Flat Glass is currently generating about -0.26 per unit of volatility. If you would invest  464,000  in Asahimas Flat Glass on October 7, 2024 and sell it today you would lose (28,000) from holding Asahimas Flat Glass or give up 6.03% of portfolio value over 90 days.

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

Integra Indocabinet Tbk  vs.  Asahimas Flat Glass

Integra Indocabinet Tbk

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integra Indocabinet Tbk are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Integra Indocabinet disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Integra Indocabinet and Asahimas Flat

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

The idea behind Integra Indocabinet Tbk and Asahimas Flat Glass 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.