Correlation Between Astra Agro and Bank Danamon
Can any of the company-specific risk be diversified away by investing in both Astra Agro and Bank Danamon 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 Astra Agro and Bank Danamon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Agro Lestari and Bank Danamon Indonesia, you can compare the effects of market volatilities on Astra Agro and Bank Danamon 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 Astra Agro with a short position of Bank Danamon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Agro and Bank Danamon.
Diversification Opportunities for Astra Agro and Bank Danamon
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astra and Bank is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Astra Agro Lestari and Bank Danamon Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Danamon Indonesia and Astra Agro 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 Astra Agro Lestari are associated (or correlated) with Bank Danamon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Danamon Indonesia has no effect on the direction of Astra Agro i.e., Astra Agro and Bank Danamon go up and down completely randomly.
Pair Corralation between Astra Agro and Bank Danamon
Assuming the 90 days trading horizon Astra Agro Lestari is expected to under-perform the Bank Danamon. In addition to that, Astra Agro is 1.11 times more volatile than Bank Danamon Indonesia. It trades about -0.21 of its total potential returns per unit of risk. Bank Danamon Indonesia is currently generating about -0.05 per unit of volatility. If you would invest 258,000 in Bank Danamon Indonesia on November 5, 2024 and sell it today you would lose (2,000) from holding Bank Danamon Indonesia or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Agro Lestari vs. Bank Danamon Indonesia
Performance |
| Timeline |
| Astra Agro Lestari |
| Bank Danamon Indonesia |
Astra Agro and Bank Danamon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Agro and Bank Danamon
The main advantage of trading using opposite Astra Agro and Bank Danamon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Agro position performs unexpectedly, Bank Danamon 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 Bank Danamon will offset losses from the drop in Bank Danamon's long position.| Astra Agro vs. Perusahaan Perkebunan London | Astra Agro vs. United Tractors Tbk | Astra Agro vs. Vale Indonesia Tbk | Astra Agro vs. Astra International Tbk |
| Bank Danamon vs. Bank Cimb Niaga | Bank Danamon vs. Indosat Tbk | Bank Danamon vs. Astra Agro Lestari | Bank Danamon vs. Bank Mandiri Persero |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |