Correlation Between PT Astra and Signet International
Can any of the company-specific risk be diversified away by investing in both PT Astra and Signet International 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 PT Astra and Signet International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Astra International and Signet International Holdings, you can compare the effects of market volatilities on PT Astra and Signet International 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 PT Astra with a short position of Signet International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Signet International.
Diversification Opportunities for PT Astra and Signet International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ASII and Signet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Signet International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signet International and PT Astra 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 PT Astra International are associated (or correlated) with Signet International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signet International has no effect on the direction of PT Astra i.e., PT Astra and Signet International go up and down completely randomly.
Pair Corralation between PT Astra and Signet International
Given the investment horizon of 90 days PT Astra International is expected to generate 0.73 times more return on investment than Signet International. However, PT Astra International is 1.37 times less risky than Signet International. It trades about 0.09 of its potential returns per unit of risk. Signet International Holdings is currently generating about 0.07 per unit of risk. If you would invest 0.10 in PT Astra International on October 21, 2024 and sell it today you would lose (0.05) from holding PT Astra International or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
PT Astra International vs. Signet International Holdings
Performance |
| Timeline |
| PT Astra International |
| Signet International |
PT Astra and Signet International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Signet International
The main advantage of trading using opposite PT Astra and Signet International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Signet International 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 Signet International will offset losses from the drop in Signet International's long position.| PT Astra vs. Embotelladora Andina SA | PT Astra vs. Embotelladora Andina SA | PT Astra vs. Apple Rush | PT Astra vs. Alkame Holdings |
| Signet International vs. Embotelladora Andina SA | Signet International vs. PT Astra International | Signet International vs. Apple Rush | Signet International vs. Embotelladora Andina SA |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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