Correlation Between PT Astra and DAIDO METAL
Can any of the company-specific risk be diversified away by investing in both PT Astra and DAIDO METAL 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 DAIDO METAL 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 DAIDO METAL TD, you can compare the effects of market volatilities on PT Astra and DAIDO METAL 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 DAIDO METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and DAIDO METAL.
Diversification Opportunities for PT Astra and DAIDO METAL
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ASJA and DAIDO is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and DAIDO METAL TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIDO METAL TD 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 DAIDO METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIDO METAL TD has no effect on the direction of PT Astra i.e., PT Astra and DAIDO METAL go up and down completely randomly.
Pair Corralation between PT Astra and DAIDO METAL
Assuming the 90 days trading horizon PT Astra International is expected to under-perform the DAIDO METAL. In addition to that, PT Astra is 2.49 times more volatile than DAIDO METAL TD. It trades about -0.13 of its total potential returns per unit of risk. DAIDO METAL TD is currently generating about 0.17 per unit of volatility. If you would invest 282.00 in DAIDO METAL TD on October 11, 2024 and sell it today you would earn a total of 16.00 from holding DAIDO METAL TD or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. DAIDO METAL TD
Performance |
| Timeline |
| PT Astra International |
| DAIDO METAL TD |
PT Astra and DAIDO METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and DAIDO METAL
The main advantage of trading using opposite PT Astra and DAIDO METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, DAIDO METAL 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 DAIDO METAL will offset losses from the drop in DAIDO METAL's long position.| PT Astra vs. FAST RETAIL ADR | PT Astra vs. SIDETRADE EO 1 | PT Astra vs. alstria office REIT AG | PT Astra vs. FLOW TRADERS LTD |
| DAIDO METAL vs. PT Astra International | DAIDO METAL vs. Superior Plus Corp | DAIDO METAL vs. NMI Holdings | DAIDO METAL vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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