Correlation Between Astra International and Tanah Laut
Can any of the company-specific risk be diversified away by investing in both Astra International and Tanah Laut 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 Tanah Laut 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 Tanah Laut Tbk, you can compare the effects of market volatilities on Astra International and Tanah Laut 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 Tanah Laut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Tanah Laut.
Diversification Opportunities for Astra International and Tanah Laut
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and Tanah is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Tanah Laut Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanah Laut 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 Tanah Laut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanah Laut Tbk has no effect on the direction of Astra International i.e., Astra International and Tanah Laut go up and down completely randomly.
Pair Corralation between Astra International and Tanah Laut
Assuming the 90 days trading horizon Astra International Tbk is expected to generate 0.38 times more return on investment than Tanah Laut. However, Astra International Tbk is 2.65 times less risky than Tanah Laut. It trades about 0.01 of its potential returns per unit of risk. Tanah Laut Tbk is currently generating about -0.03 per unit of risk. If you would invest 464,165 in Astra International Tbk on November 5, 2024 and sell it today you would earn a total of 17,835 from holding Astra International Tbk or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Astra International Tbk vs. Tanah Laut Tbk
Performance |
| Timeline |
| Astra International Tbk |
| Tanah Laut Tbk |
Astra International and Tanah Laut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Tanah Laut
The main advantage of trading using opposite Astra International and Tanah Laut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Tanah Laut 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 Tanah Laut will offset losses from the drop in Tanah Laut'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 |
| Tanah Laut vs. Inter Delta Tbk | Tanah Laut vs. Humpuss Intermoda Transportasi | Tanah Laut vs. Fortune Indonesia Tbk | Tanah Laut vs. PT MNC Energy |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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