Correlation Between PT Astra and Fbec Worldwide
Can any of the company-specific risk be diversified away by investing in both PT Astra and Fbec Worldwide 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 Fbec Worldwide 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 Fbec Worldwide, you can compare the effects of market volatilities on PT Astra and Fbec Worldwide 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 Fbec Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Fbec Worldwide.
Diversification Opportunities for PT Astra and Fbec Worldwide
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ASII and Fbec is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Fbec Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fbec Worldwide 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 Fbec Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fbec Worldwide has no effect on the direction of PT Astra i.e., PT Astra and Fbec Worldwide go up and down completely randomly.
Pair Corralation between PT Astra and Fbec Worldwide
Given the investment horizon of 90 days PT Astra is expected to generate 5.6 times less return on investment than Fbec Worldwide. But when comparing it to its historical volatility, PT Astra International is 3.89 times less risky than Fbec Worldwide. It trades about 0.09 of its potential returns per unit of risk. Fbec Worldwide is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Fbec Worldwide on November 2, 2024 and sell it today you would earn a total of 0.04 from holding Fbec Worldwide or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
PT Astra International vs. Fbec Worldwide
Performance |
| Timeline |
| PT Astra International |
| Fbec Worldwide |
PT Astra and Fbec Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Fbec Worldwide
The main advantage of trading using opposite PT Astra and Fbec Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Fbec Worldwide 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 Fbec Worldwide will offset losses from the drop in Fbec Worldwide'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 |
| Fbec Worldwide vs. Flow Beverage Corp | Fbec Worldwide vs. Barfresh Food Group | Fbec Worldwide vs. Hill Street Beverage | Fbec Worldwide vs. DNA Brands |
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 Stocks Directory module to find actively traded stocks across global markets.
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