Correlation Between Alumindo Light and Astra Graphia
Can any of the company-specific risk be diversified away by investing in both Alumindo Light 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 Alumindo Light and Astra Graphia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alumindo Light Metal and Astra Graphia Tbk, you can compare the effects of market volatilities on Alumindo Light 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 Alumindo Light with a short position of Astra Graphia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumindo Light and Astra Graphia.
Diversification Opportunities for Alumindo Light and Astra Graphia
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alumindo and Astra is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Alumindo Light Metal 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 Alumindo Light 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 Alumindo Light Metal 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 Alumindo Light i.e., Alumindo Light and Astra Graphia go up and down completely randomly.
Pair Corralation between Alumindo Light and Astra Graphia
Assuming the 90 days trading horizon Alumindo Light Metal is expected to under-perform the Astra Graphia. In addition to that, Alumindo Light is 3.48 times more volatile than Astra Graphia Tbk. It trades about -0.09 of its total potential returns per unit of risk. Astra Graphia Tbk is currently generating about 0.01 per unit of volatility. If you would invest 84,785 in Astra Graphia Tbk on September 2, 2024 and sell it today you would earn a total of 215.00 from holding Astra Graphia Tbk or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.57% |
| Values | Daily Returns |
Alumindo Light Metal vs. Astra Graphia Tbk
Performance |
| Timeline |
| Alumindo Light Metal |
| Astra Graphia Tbk |
Alumindo Light and Astra Graphia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumindo Light and Astra Graphia
The main advantage of trading using opposite Alumindo Light and Astra Graphia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumindo Light 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.| Alumindo Light vs. Perusahaan Gas Negara | Alumindo Light vs. Telkom Indonesia Tbk | Alumindo Light vs. Mitra Pinasthika Mustika | Alumindo Light vs. Jakarta Int Hotels |
| Astra Graphia vs. Matahari Department Store | Astra Graphia vs. Multi Medika Internasional | Astra Graphia vs. Visi Media Asia | Astra Graphia vs. Bayan Resources 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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