Correlation Between Astra International and Perusahaan Perkebunan
Can any of the company-specific risk be diversified away by investing in both Astra International and Perusahaan Perkebunan 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 Perusahaan Perkebunan 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 Perusahaan Perkebunan London, you can compare the effects of market volatilities on Astra International and Perusahaan Perkebunan 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 Perusahaan Perkebunan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Perusahaan Perkebunan.
Diversification Opportunities for Astra International and Perusahaan Perkebunan
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Astra and Perusahaan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Perusahaan Perkebunan London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perkebunan 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 Perusahaan Perkebunan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perkebunan has no effect on the direction of Astra International i.e., Astra International and Perusahaan Perkebunan go up and down completely randomly.
Pair Corralation between Astra International and Perusahaan Perkebunan
Assuming the 90 days trading horizon Astra International Tbk is expected to under-perform the Perusahaan Perkebunan. But the stock apears to be less risky and, when comparing its historical volatility, Astra International Tbk is 2.05 times less risky than Perusahaan Perkebunan. The stock trades about -0.02 of its potential returns per unit of risk. The Perusahaan Perkebunan London is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 89,500 in Perusahaan Perkebunan London on August 26, 2024 and sell it today you would earn a total of 10,000 from holding Perusahaan Perkebunan London or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. Perusahaan Perkebunan London
Performance |
| Timeline |
| Astra International Tbk |
| Perusahaan Perkebunan |
Astra International and Perusahaan Perkebunan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Perusahaan Perkebunan
The main advantage of trading using opposite Astra International and Perusahaan Perkebunan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Perusahaan Perkebunan 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 Perusahaan Perkebunan will offset losses from the drop in Perusahaan Perkebunan'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 |
| Perusahaan Perkebunan vs. Charoen Pokphand Indonesia | Perusahaan Perkebunan vs. Kalbe Farma Tbk | Perusahaan Perkebunan vs. Indofood Cbp Sukses | Perusahaan Perkebunan vs. Akr Corporindo 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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