Correlation Between Astra International and Hero Supermarket
Can any of the company-specific risk be diversified away by investing in both Astra International and Hero Supermarket 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 Hero Supermarket 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 Hero Supermarket Tbk, you can compare the effects of market volatilities on Astra International and Hero Supermarket 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 Hero Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Hero Supermarket.
Diversification Opportunities for Astra International and Hero Supermarket
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Astra and Hero is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Hero Supermarket Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hero Supermarket Tbk 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 Hero Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hero Supermarket Tbk has no effect on the direction of Astra International i.e., Astra International and Hero Supermarket go up and down completely randomly.
Pair Corralation between Astra International and Hero Supermarket
Assuming the 90 days trading horizon Astra International Tbk is expected to generate 0.71 times more return on investment than Hero Supermarket. However, Astra International Tbk is 1.42 times less risky than Hero Supermarket. It trades about 0.05 of its potential returns per unit of risk. Hero Supermarket Tbk is currently generating about -0.06 per unit of risk. If you would invest 458,661 in Astra International Tbk on September 3, 2024 and sell it today you would earn a total of 51,339 from holding Astra International Tbk or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. Hero Supermarket Tbk
Performance |
| Timeline |
| Astra International Tbk |
| Hero Supermarket Tbk |
Astra International and Hero Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Hero Supermarket
The main advantage of trading using opposite Astra International and Hero Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Hero Supermarket 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 Hero Supermarket will offset losses from the drop in Hero Supermarket'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 |
| Hero Supermarket vs. Astra International Tbk | Hero Supermarket vs. Unilever Indonesia Tbk | Hero Supermarket vs. Telkom Indonesia Tbk | Hero Supermarket 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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