Correlation Between Asiaplast Industries and Anugerah Kagum
Can any of the company-specific risk be diversified away by investing in both Asiaplast Industries and Anugerah Kagum 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 Asiaplast Industries and Anugerah Kagum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiaplast Industries Tbk and Anugerah Kagum Karya, you can compare the effects of market volatilities on Asiaplast Industries and Anugerah Kagum 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 Asiaplast Industries with a short position of Anugerah Kagum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiaplast Industries and Anugerah Kagum.
Diversification Opportunities for Asiaplast Industries and Anugerah Kagum
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asiaplast and Anugerah is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Asiaplast Industries Tbk and Anugerah Kagum Karya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anugerah Kagum Karya and Asiaplast Industries 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 Asiaplast Industries Tbk are associated (or correlated) with Anugerah Kagum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anugerah Kagum Karya has no effect on the direction of Asiaplast Industries i.e., Asiaplast Industries and Anugerah Kagum go up and down completely randomly.
Pair Corralation between Asiaplast Industries and Anugerah Kagum
Assuming the 90 days trading horizon Asiaplast Industries Tbk is expected to generate 0.74 times more return on investment than Anugerah Kagum. However, Asiaplast Industries Tbk is 1.36 times less risky than Anugerah Kagum. It trades about -0.07 of its potential returns per unit of risk. Anugerah Kagum Karya is currently generating about -1.17 per unit of risk. If you would invest 58,000 in Asiaplast Industries Tbk on January 16, 2024 and sell it today you would lose (2,500) from holding Asiaplast Industries Tbk or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiaplast Industries Tbk vs. Anugerah Kagum Karya
Performance |
| Timeline |
| Asiaplast Industries Tbk |
| Anugerah Kagum Karya |
Asiaplast Industries and Anugerah Kagum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiaplast Industries and Anugerah Kagum
The main advantage of trading using opposite Asiaplast Industries and Anugerah Kagum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiaplast Industries position performs unexpectedly, Anugerah Kagum 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 Anugerah Kagum will offset losses from the drop in Anugerah Kagum's long position.| Asiaplast Industries vs. Perusahaan Gas Negara | Asiaplast Industries vs. Bukit Asam Tbk | Asiaplast Industries vs. Telkom Indonesia Tbk |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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