Correlation Between PT Astra and Hanover Foods
Can any of the company-specific risk be diversified away by investing in both PT Astra and Hanover Foods 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 Hanover Foods 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 Hanover Foods, you can compare the effects of market volatilities on PT Astra and Hanover Foods 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 Hanover Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Hanover Foods.
Diversification Opportunities for PT Astra and Hanover Foods
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASII and Hanover is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Hanover Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Foods 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 Hanover Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover Foods has no effect on the direction of PT Astra i.e., PT Astra and Hanover Foods go up and down completely randomly.
Pair Corralation between PT Astra and Hanover Foods
Given the investment horizon of 90 days PT Astra International is expected to generate 33.17 times more return on investment than Hanover Foods. However, PT Astra is 33.17 times more volatile than Hanover Foods. It trades about 0.11 of its potential returns per unit of risk. Hanover Foods is currently generating about -0.01 per unit of risk. If you would invest 0.05 in PT Astra International on September 4, 2024 and sell it today you would earn a total of 0.01 from holding PT Astra International or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.33% |
| Values | Daily Returns |
PT Astra International vs. Hanover Foods
Performance |
| Timeline |
| PT Astra International |
| Hanover Foods |
PT Astra and Hanover Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Hanover Foods
The main advantage of trading using opposite PT Astra and Hanover Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Hanover Foods 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 Hanover Foods will offset losses from the drop in Hanover Foods' long position.| PT Astra vs. Embotelladora Andina SA | PT Astra vs. Embotelladora Andina SA | PT Astra vs. Apple Rush | PT Astra vs. Alkame Holdings |
| Hanover Foods vs. Arrow Financial | Hanover Foods vs. Siriuspoint | Hanover Foods vs. LithiumBank Resources Corp | Hanover Foods vs. Academy Sports Outdoors |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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