Correlation Between Asiaplast Industries and Astra Graphia
Can any of the company-specific risk be diversified away by investing in both Asiaplast Industries 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 Asiaplast Industries and Astra Graphia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiaplast Industries Tbk and Astra Graphia Tbk, you can compare the effects of market volatilities on Asiaplast Industries 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 Asiaplast Industries with a short position of Astra Graphia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiaplast Industries and Astra Graphia.
Diversification Opportunities for Asiaplast Industries and Astra Graphia
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asiaplast and Astra is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Asiaplast Industries 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 Asiaplast Industries 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 Asiaplast Industries 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 Asiaplast Industries i.e., Asiaplast Industries and Astra Graphia go up and down completely randomly.
Pair Corralation between Asiaplast Industries and Astra Graphia
Assuming the 90 days trading horizon Asiaplast Industries Tbk is expected to generate 3.11 times more return on investment than Astra Graphia. However, Asiaplast Industries is 3.11 times more volatile than Astra Graphia Tbk. It trades about 0.05 of its potential returns per unit of risk. Astra Graphia Tbk is currently generating about 0.01 per unit of risk. If you would invest 47,354 in Asiaplast Industries Tbk on September 2, 2024 and sell it today you would earn a total of 12,646 from holding Asiaplast Industries Tbk or generate 26.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiaplast Industries Tbk vs. Astra Graphia Tbk
Performance |
| Timeline |
| Asiaplast Industries Tbk |
| Astra Graphia Tbk |
Asiaplast Industries and Astra Graphia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiaplast Industries and Astra Graphia
The main advantage of trading using opposite Asiaplast Industries and Astra Graphia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiaplast Industries 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.| Asiaplast Industries vs. Argha Karya Prima | Asiaplast Industries vs. Alumindo Light Metal | Asiaplast Industries vs. Anugerah Kagum Karya | Asiaplast Industries vs. Asahimas Flat Glass |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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