Correlation Between Astra International and PT MNC
Can any of the company-specific risk be diversified away by investing in both Astra International and PT MNC 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 PT MNC 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 PT MNC Energy, you can compare the effects of market volatilities on Astra International and PT MNC 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 PT MNC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and PT MNC.
Diversification Opportunities for Astra International and PT MNC
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and IATA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and PT MNC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT MNC Energy 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 PT MNC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT MNC Energy has no effect on the direction of Astra International i.e., Astra International and PT MNC go up and down completely randomly.
Pair Corralation between Astra International and PT MNC
Assuming the 90 days trading horizon Astra International Tbk is expected to under-perform the PT MNC. But the stock apears to be less risky and, when comparing its historical volatility, Astra International Tbk is 1.99 times less risky than PT MNC. The stock trades about -0.02 of its potential returns per unit of risk. The PT MNC Energy is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,900 in PT MNC Energy on August 31, 2024 and sell it today you would earn a total of 500.00 from holding PT MNC Energy or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. PT MNC Energy
Performance |
| Timeline |
| Astra International Tbk |
| PT MNC Energy |
Astra International and PT MNC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and PT MNC
The main advantage of trading using opposite Astra International and PT MNC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, PT MNC 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 MNC will offset losses from the drop in PT MNC's long position.| Astra International vs. Japfa Comfeed Indonesia | Astra International vs. Charoen Pokphand Indonesia | Astra International vs. Erajaya Swasembada Tbk | Astra International vs. Indofood Cbp Sukses |
| PT MNC vs. Matahari Department Store | PT MNC vs. Multi Medika Internasional | PT MNC vs. Visi Media Asia | PT MNC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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