Correlation Between Astra Agro and Jaya Agra
Can any of the company-specific risk be diversified away by investing in both Astra Agro and Jaya Agra 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 Jaya Agra 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 Jaya Agra Wattie, you can compare the effects of market volatilities on Astra Agro and Jaya Agra 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 Jaya Agra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Agro and Jaya Agra.
Diversification Opportunities for Astra Agro and Jaya Agra
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and Jaya is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Astra Agro Lestari and Jaya Agra Wattie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaya Agra Wattie 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 Jaya Agra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaya Agra Wattie has no effect on the direction of Astra Agro i.e., Astra Agro and Jaya Agra go up and down completely randomly.
Pair Corralation between Astra Agro and Jaya Agra
Assuming the 90 days trading horizon Astra Agro Lestari is expected to under-perform the Jaya Agra. But the stock apears to be less risky and, when comparing its historical volatility, Astra Agro Lestari is 7.26 times less risky than Jaya Agra. The stock trades about -0.35 of its potential returns per unit of risk. The Jaya Agra Wattie is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,700 in Jaya Agra Wattie on August 27, 2024 and sell it today you would lose (300.00) from holding Jaya Agra Wattie or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Agro Lestari vs. Jaya Agra Wattie
Performance |
| Timeline |
| Astra Agro Lestari |
| Jaya Agra Wattie |
Astra Agro and Jaya Agra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Agro and Jaya Agra
The main advantage of trading using opposite Astra Agro and Jaya Agra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Agro position performs unexpectedly, Jaya Agra 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 Jaya Agra will offset losses from the drop in Jaya Agra'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 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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