Correlation Between PT Astra and UNIVERSAL MUSIC
Can any of the company-specific risk be diversified away by investing in both PT Astra and UNIVERSAL MUSIC 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 UNIVERSAL MUSIC 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 UNIVERSAL MUSIC GROUP, you can compare the effects of market volatilities on PT Astra and UNIVERSAL MUSIC 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 UNIVERSAL MUSIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and UNIVERSAL MUSIC.
Diversification Opportunities for PT Astra and UNIVERSAL MUSIC
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASJA and UNIVERSAL is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and UNIVERSAL MUSIC GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVERSAL MUSIC GROUP 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 UNIVERSAL MUSIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVERSAL MUSIC GROUP has no effect on the direction of PT Astra i.e., PT Astra and UNIVERSAL MUSIC go up and down completely randomly.
Pair Corralation between PT Astra and UNIVERSAL MUSIC
Assuming the 90 days trading horizon PT Astra International is expected to generate 2.02 times more return on investment than UNIVERSAL MUSIC. However, PT Astra is 2.02 times more volatile than UNIVERSAL MUSIC GROUP. It trades about 0.15 of its potential returns per unit of risk. UNIVERSAL MUSIC GROUP is currently generating about -0.16 per unit of risk. If you would invest 28.00 in PT Astra International on September 3, 2024 and sell it today you would earn a total of 2.00 from holding PT Astra International or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. UNIVERSAL MUSIC GROUP
Performance |
| Timeline |
| PT Astra International |
| UNIVERSAL MUSIC GROUP |
PT Astra and UNIVERSAL MUSIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and UNIVERSAL MUSIC
The main advantage of trading using opposite PT Astra and UNIVERSAL MUSIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, UNIVERSAL MUSIC 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 UNIVERSAL MUSIC will offset losses from the drop in UNIVERSAL MUSIC's long position.| PT Astra vs. ARISTOCRAT LEISURE | PT Astra vs. ON SEMICONDUCTOR | PT Astra vs. ITALIAN WINE BRANDS | PT Astra vs. BE Semiconductor Industries |
| UNIVERSAL MUSIC vs. Apple Inc | UNIVERSAL MUSIC vs. Apple Inc | UNIVERSAL MUSIC vs. Apple Inc | UNIVERSAL MUSIC vs. Apple Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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