Correlation Between Polychem Indonesia and Astra Graphia
Can any of the company-specific risk be diversified away by investing in both Polychem Indonesia and Astra Graphia 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 Polychem Indonesia and Astra Graphia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polychem Indonesia Tbk and Astra Graphia Tbk, you can compare the effects of market volatilities on Polychem Indonesia and Astra Graphia 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 Polychem Indonesia with a short position of Astra Graphia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polychem Indonesia and Astra Graphia.
Diversification Opportunities for Polychem Indonesia and Astra Graphia
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polychem and Astra is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Polychem Indonesia Tbk and Astra Graphia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Graphia Tbk and Polychem Indonesia 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 Polychem Indonesia Tbk are associated (or correlated) with Astra Graphia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Graphia Tbk has no effect on the direction of Polychem Indonesia i.e., Polychem Indonesia and Astra Graphia go up and down completely randomly.
Pair Corralation between Polychem Indonesia and Astra Graphia
Assuming the 90 days trading horizon Polychem Indonesia Tbk is expected to under-perform the Astra Graphia. In addition to that, Polychem Indonesia is 1.82 times more volatile than Astra Graphia Tbk. It trades about -0.15 of its total potential returns per unit of risk. Astra Graphia Tbk is currently generating about -0.22 per unit of volatility. If you would invest 90,000 in Astra Graphia Tbk on August 29, 2024 and sell it today you would lose (5,000) from holding Astra Graphia Tbk or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polychem Indonesia Tbk vs. Astra Graphia Tbk
Performance |
| Timeline |
| Polychem Indonesia Tbk |
| Astra Graphia Tbk |
Polychem Indonesia and Astra Graphia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polychem Indonesia and Astra Graphia
The main advantage of trading using opposite Polychem Indonesia and Astra Graphia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polychem Indonesia position performs unexpectedly, Astra Graphia 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 Astra Graphia will offset losses from the drop in Astra Graphia's long position.| Polychem Indonesia vs. Gajah Tunggal Tbk | Polychem Indonesia vs. Astra Graphia Tbk | Polychem Indonesia vs. Citra Marga Nusaphala | Polychem Indonesia vs. Sentul City Tbk |
| Astra Graphia vs. Astra Otoparts Tbk | Astra Graphia vs. Citra Marga Nusaphala | Astra Graphia vs. Hexindo Adiperkasa Tbk | Astra Graphia vs. Metrodata Electronics 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |