Correlation Between Signet International and PT Astra
Can any of the company-specific risk be diversified away by investing in both Signet International and PT Astra 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 Signet International and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Signet International Holdings and PT Astra International, you can compare the effects of market volatilities on Signet International and PT Astra 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 Signet International with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signet International and PT Astra.
Diversification Opportunities for Signet International and PT Astra
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Signet and ASII is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Signet International Holdings and PT Astra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Astra International and Signet International 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 Signet International Holdings are associated (or correlated) with PT Astra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Astra International has no effect on the direction of Signet International i.e., Signet International and PT Astra go up and down completely randomly.
Pair Corralation between Signet International and PT Astra
Given the investment horizon of 90 days Signet International is expected to generate 1.03 times less return on investment than PT Astra. In addition to that, Signet International is 1.38 times more volatile than PT Astra International. It trades about 0.07 of its total potential returns per unit of risk. PT Astra International is currently generating about 0.09 per unit of volatility. If you would invest 0.08 in PT Astra International on November 2, 2024 and sell it today you would lose (0.03) from holding PT Astra International or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Signet International Holdings vs. PT Astra International
Performance |
| Timeline |
| Signet International |
| PT Astra International |
Signet International and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Signet International and PT Astra
The main advantage of trading using opposite Signet International and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signet International position performs unexpectedly, PT Astra 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 PT Astra will offset losses from the drop in PT Astra's long position.| Signet International vs. Embotelladora Andina SA | Signet International vs. PT Astra International | Signet International vs. Apple Rush | Signet International vs. Embotelladora Andina SA |
| PT Astra vs. Embotelladora Andina SA | PT Astra vs. Embotelladora Andina SA | PT Astra vs. Apple Rush | PT Astra vs. Alkame Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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