Correlation Between PT Data and Ashmore Asset

Can any of the company-specific risk be diversified away by investing in both PT Data and Ashmore Asset 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 PT Data and Ashmore Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Data Sinergitama and Ashmore Asset Management, you can compare the effects of market volatilities on PT Data and Ashmore Asset 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 PT Data with a short position of Ashmore Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Data and Ashmore Asset.

Diversification Opportunities for PT Data and Ashmore Asset

0.52

Correlation Coefficient

PT Data  Ashmore Asset

Very weak diversification

The 3 months correlation between ELIT and Ashmore is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and Ashmore Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Asset Management and PT Data 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 PT Data Sinergitama are associated (or correlated) with Ashmore Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Asset Management has no effect on the direction of PT Data i.e., PT Data and Ashmore Asset go up and down completely randomly.

Pair Corralation between PT Data and Ashmore Asset

Assuming the 90 days trading horizon PT Data Sinergitama is expected to generate 0.94 times more return on investment than Ashmore Asset. However, PT Data Sinergitama is 1.06 times less risky than Ashmore Asset. It trades about 0.09 of its potential returns per unit of risk. Ashmore Asset Management is currently generating about -0.09 per unit of risk. If you would invest  10,800  in PT Data Sinergitama on September 13, 2024 and sell it today you would earn a total of  1,600  from holding PT Data Sinergitama or generate 14.81% return on investment over 90 days.

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

PT Data Sinergitama  vs.  Ashmore Asset Management

PT Data Sinergitama

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Data Sinergitama are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Data disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ashmore Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ashmore Asset Management 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 PT Data and Ashmore Asset

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

The idea behind PT Data Sinergitama and Ashmore Asset Management 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.