Correlation Between PT Astra and Fuyao Glass
Can any of the company-specific risk be diversified away by investing in both PT Astra and Fuyao Glass 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 Fuyao Glass 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 Fuyao Glass Industry, you can compare the effects of market volatilities on PT Astra and Fuyao Glass 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 Fuyao Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Fuyao Glass.
Diversification Opportunities for PT Astra and Fuyao Glass
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASJA and Fuyao is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Fuyao Glass Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuyao Glass Industry 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 Fuyao Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuyao Glass Industry has no effect on the direction of PT Astra i.e., PT Astra and Fuyao Glass go up and down completely randomly.
Pair Corralation between PT Astra and Fuyao Glass
Assuming the 90 days trading horizon PT Astra is expected to generate 4.34 times less return on investment than Fuyao Glass. In addition to that, PT Astra is 2.03 times more volatile than Fuyao Glass Industry. It trades about 0.01 of its total potential returns per unit of risk. Fuyao Glass Industry is currently generating about 0.12 per unit of volatility. If you would invest 510.00 in Fuyao Glass Industry on November 2, 2024 and sell it today you would earn a total of 130.00 from holding Fuyao Glass Industry or generate 25.49% 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. Fuyao Glass Industry
Performance |
| Timeline |
| PT Astra International |
| Fuyao Glass Industry |
PT Astra and Fuyao Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Fuyao Glass
The main advantage of trading using opposite PT Astra and Fuyao Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Fuyao Glass 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 Fuyao Glass will offset losses from the drop in Fuyao Glass' long position.| PT Astra vs. Entravision Communications | PT Astra vs. Easy Software AG | PT Astra vs. Vienna Insurance Group | PT Astra vs. Direct Line Insurance |
| Fuyao Glass vs. Dno ASA | Fuyao Glass vs. DENSO P ADR | Fuyao Glass vs. Aptiv PLC | Fuyao Glass vs. Bridgestone |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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