Correlation Between Astra International and Era Media
Can any of the company-specific risk be diversified away by investing in both Astra International and Era Media 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 Era Media 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 Era Media Sejahtera, you can compare the effects of market volatilities on Astra International and Era Media 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 Era Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Era Media.
Diversification Opportunities for Astra International and Era Media
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astra and Era is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Era Media Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Media Sejahtera 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 Era Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Media Sejahtera has no effect on the direction of Astra International i.e., Astra International and Era Media go up and down completely randomly.
Pair Corralation between Astra International and Era Media
Assuming the 90 days trading horizon Astra International Tbk is expected to generate 0.59 times more return on investment than Era Media. However, Astra International Tbk is 1.69 times less risky than Era Media. It trades about -0.28 of its potential returns per unit of risk. Era Media Sejahtera is currently generating about -0.23 per unit of risk. If you would invest 530,000 in Astra International Tbk on August 24, 2024 and sell it today you would lose (38,000) from holding Astra International Tbk or give up 7.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. Era Media Sejahtera
Performance |
| Timeline |
| Astra International Tbk |
| Era Media Sejahtera |
Astra International and Era Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Era Media
The main advantage of trading using opposite Astra International and Era Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Era Media 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 Era Media will offset losses from the drop in Era Media'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 |
| Era Media vs. Bank Central Asia | Era Media vs. Bank Rakyat Indonesia | Era Media vs. Bayan Resources Tbk | Era Media vs. Bank Mandiri Persero |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Global Correlations Find global opportunities by holding instruments from different markets |