Correlation Between Astra International and Bank Central
Can any of the company-specific risk be diversified away by investing in both Astra International and Bank Central 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 International and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra International Tbk and Bank Central Asia, you can compare the effects of market volatilities on Astra International and Bank Central 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 International with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Bank Central.
Diversification Opportunities for Astra International and Bank Central
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Astra and Bank is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia and Astra 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 Astra International Tbk are associated (or correlated) with Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Astra International i.e., Astra International and Bank Central go up and down completely randomly.
Pair Corralation between Astra International and Bank Central
Assuming the 90 days trading horizon Astra International Tbk is expected to generate 0.74 times more return on investment than Bank Central. However, Astra International Tbk is 1.36 times less risky than Bank Central. It trades about -0.19 of its potential returns per unit of risk. Bank Central Asia is currently generating about -0.27 per unit of risk. If you would invest 494,000 in Astra International Tbk on November 18, 2024 and sell it today you would lose (25,000) from holding Astra International Tbk or give up 5.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. Bank Central Asia
Performance |
| Timeline |
| Astra International Tbk |
| Bank Central Asia |
Astra International and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Bank Central
The main advantage of trading using opposite Astra International and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central's long position.| Astra International vs. Telkom Indonesia Tbk | Astra International vs. Bank Mandiri Persero | Astra International vs. Bank Central Asia | Astra International vs. PT Indofood Sukses |
| Bank Central vs. Bank Rakyat Indonesia | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Bank Negara Indonesia | Bank Central 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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