Correlation Between Ashmore Asset and PT Pelayaran

Can any of the company-specific risk be diversified away by investing in both Ashmore Asset and PT Pelayaran 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 PT Pelayaran 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 PT Pelayaran Tamarin, you can compare the effects of market volatilities on Ashmore Asset and PT Pelayaran 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 PT Pelayaran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashmore Asset and PT Pelayaran.

Diversification Opportunities for Ashmore Asset and PT Pelayaran

-0.43

Correlation Coefficient

Ashmore Asset  PT Pelayaran

Very good diversification

The 3 months correlation between Ashmore and TAMU is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ashmore Asset Management and PT Pelayaran Tamarin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Pelayaran Tamarin 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 PT Pelayaran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Pelayaran Tamarin has no effect on the direction of Ashmore Asset i.e., Ashmore Asset and PT Pelayaran go up and down completely randomly.

Pair Corralation between Ashmore Asset and PT Pelayaran

Assuming the 90 days trading horizon Ashmore Asset Management is expected to under-perform the PT Pelayaran. But the stock apears to be less risky and, when comparing its historical volatility, Ashmore Asset Management is 1.98 times less risky than PT Pelayaran. The stock trades about -0.27 of its potential returns per unit of risk. The PT Pelayaran Tamarin is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,400  in PT Pelayaran Tamarin on September 4, 2024 and sell it today you would earn a total of  300.00  from holding PT Pelayaran Tamarin or generate 21.43% return on investment over 90 days.

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

Ashmore Asset Management  vs.  PT Pelayaran Tamarin

Ashmore Asset Management

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ashmore Asset Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Ashmore Asset may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PT Pelayaran Tamarin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Pelayaran Tamarin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Ashmore Asset and PT Pelayaran

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

The idea behind Ashmore Asset Management and PT Pelayaran Tamarin 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.