Correlation Between Astra International and Terregra Asia
Can any of the company-specific risk be diversified away by investing in both Astra International and Terregra Asia 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 Terregra Asia 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 Terregra Asia Energy, you can compare the effects of market volatilities on Astra International and Terregra Asia 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 Terregra Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Terregra Asia.
Diversification Opportunities for Astra International and Terregra Asia
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astra and Terregra is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Terregra Asia Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terregra Asia 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 Terregra Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terregra Asia Energy has no effect on the direction of Astra International i.e., Astra International and Terregra Asia go up and down completely randomly.
Pair Corralation between Astra International and Terregra Asia
Assuming the 90 days trading horizon Astra International is expected to generate 4.26 times less return on investment than Terregra Asia. But when comparing it to its historical volatility, Astra International Tbk is 3.44 times less risky than Terregra Asia. It trades about 0.09 of its potential returns per unit of risk. Terregra Asia Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Terregra Asia Energy on August 30, 2024 and sell it today you would earn a total of 800.00 from holding Terregra Asia Energy or generate 72.73% 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. Terregra Asia Energy
Performance |
| Timeline |
| Astra International Tbk |
| Terregra Asia Energy |
Astra International and Terregra Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Terregra Asia
The main advantage of trading using opposite Astra International and Terregra Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Terregra Asia 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 Terregra Asia will offset losses from the drop in Terregra Asia'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 |
| Terregra Asia vs. Aneka Tambang Persero | Terregra Asia vs. Bukit Asam Tbk | Terregra Asia vs. Telkom Indonesia Tbk | Terregra Asia vs. Astra International 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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