Correlation Between PT Astra and Coca Cola
Can any of the company-specific risk be diversified away by investing in both PT Astra and Coca Cola 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 Coca Cola 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 Coca Cola European Partners, you can compare the effects of market volatilities on PT Astra and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Coca Cola.
Diversification Opportunities for PT Astra and Coca Cola
Weak diversification
The 3 months correlation between ASII and Coca is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Coca Cola European Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola European 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola European has no effect on the direction of PT Astra i.e., PT Astra and Coca Cola go up and down completely randomly.
Pair Corralation between PT Astra and Coca Cola
Given the investment horizon of 90 days PT Astra International is expected to generate 19.17 times more return on investment than Coca Cola. However, PT Astra is 19.17 times more volatile than Coca Cola European Partners. It trades about 0.15 of its potential returns per unit of risk. Coca Cola European Partners is currently generating about 0.1 per unit of risk. If you would invest 0.04 in PT Astra International on August 28, 2024 and sell it today you would earn a total of 0.01 from holding PT Astra International or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PT Astra International vs. Coca Cola European Partners
Performance |
| Timeline |
| PT Astra International |
| Coca Cola European |
PT Astra and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Coca Cola
The main advantage of trading using opposite PT Astra and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola'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 |
| Coca Cola vs. Vita Coco | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Embotelladora Andina SA | Coca Cola vs. National Beverage Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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