Correlation Between Astra International and Sekar Bumi
Can any of the company-specific risk be diversified away by investing in both Astra International and Sekar Bumi 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 Sekar Bumi 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 Sekar Bumi Tbk, you can compare the effects of market volatilities on Astra International and Sekar Bumi 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 Sekar Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Sekar Bumi.
Diversification Opportunities for Astra International and Sekar Bumi
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astra and Sekar is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Sekar Bumi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekar Bumi 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 Sekar Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekar Bumi Tbk has no effect on the direction of Astra International i.e., Astra International and Sekar Bumi go up and down completely randomly.
Pair Corralation between Astra International and Sekar Bumi
Assuming the 90 days trading horizon Astra International Tbk is expected to generate 1.33 times more return on investment than Sekar Bumi. However, Astra International is 1.33 times more volatile than Sekar Bumi Tbk. It trades about -0.01 of its potential returns per unit of risk. Sekar Bumi Tbk is currently generating about -0.53 per unit of risk. If you would invest 512,500 in Astra International Tbk on September 3, 2024 and sell it today you would lose (2,500) from holding Astra International Tbk or give up 0.49% 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. Sekar Bumi Tbk
Performance |
| Timeline |
| Astra International Tbk |
| Sekar Bumi Tbk |
Astra International and Sekar Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Sekar Bumi
The main advantage of trading using opposite Astra International and Sekar Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Sekar Bumi 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 Sekar Bumi will offset losses from the drop in Sekar Bumi'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 |
| Sekar Bumi vs. Astra International Tbk | Sekar Bumi vs. Unilever Indonesia Tbk | Sekar Bumi vs. Telkom Indonesia Tbk | Sekar Bumi 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |