Correlation Between PT Astra and Hiru
Can any of the company-specific risk be diversified away by investing in both PT Astra and Hiru 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 Hiru 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 Hiru Corporation, you can compare the effects of market volatilities on PT Astra and Hiru 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 Hiru. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Hiru.
Diversification Opportunities for PT Astra and Hiru
Significant diversification
The 3 months correlation between ASII and Hiru is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Hiru Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiru 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 Hiru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiru has no effect on the direction of PT Astra i.e., PT Astra and Hiru go up and down completely randomly.
Pair Corralation between PT Astra and Hiru
Given the investment horizon of 90 days PT Astra International is expected to generate 1.53 times more return on investment than Hiru. However, PT Astra is 1.53 times more volatile than Hiru Corporation. It trades about 0.09 of its potential returns per unit of risk. Hiru Corporation is currently generating about 0.05 per unit of risk. If you would invest 0.08 in PT Astra International on November 2, 2024 and sell it today you would lose (0.03) from holding PT Astra International or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
PT Astra International vs. Hiru Corp.
Performance |
| Timeline |
| PT Astra International |
| Hiru |
PT Astra and Hiru Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Hiru
The main advantage of trading using opposite PT Astra and Hiru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Hiru 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 Hiru will offset losses from the drop in Hiru'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 |
| Hiru vs. Indo Global Exchange | Hiru vs. Genesis Electronics Group | Hiru vs. Protext Mobility | Hiru vs. TonnerOne World Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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