Correlation Between PT Astra and ARISTOCRAT LEISURE
Can any of the company-specific risk be diversified away by investing in both PT Astra and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE, you can compare the effects of market volatilities on PT Astra and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and ARISTOCRAT LEISURE.
Diversification Opportunities for PT Astra and ARISTOCRAT LEISURE
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASJA and ARISTOCRAT is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and ARISTOCRAT LEISURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARISTOCRAT LEISURE has no effect on the direction of PT Astra i.e., PT Astra and ARISTOCRAT LEISURE go up and down completely randomly.
Pair Corralation between PT Astra and ARISTOCRAT LEISURE
Assuming the 90 days trading horizon PT Astra is expected to generate 4.66 times less return on investment than ARISTOCRAT LEISURE. In addition to that, PT Astra is 3.75 times more volatile than ARISTOCRAT LEISURE. It trades about 0.01 of its total potential returns per unit of risk. ARISTOCRAT LEISURE is currently generating about 0.17 per unit of volatility. If you would invest 2,331 in ARISTOCRAT LEISURE on September 4, 2024 and sell it today you would earn a total of 1,809 from holding ARISTOCRAT LEISURE or generate 77.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.66% |
| Values | Daily Returns |
PT Astra International vs. ARISTOCRAT LEISURE
Performance |
| Timeline |
| PT Astra International |
| ARISTOCRAT LEISURE |
PT Astra and ARISTOCRAT LEISURE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and ARISTOCRAT LEISURE
The main advantage of trading using opposite PT Astra and ARISTOCRAT LEISURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE will offset losses from the drop in ARISTOCRAT LEISURE's long position.| PT Astra vs. SBI Insurance Group | PT Astra vs. Selective Insurance Group | PT Astra vs. NEWELL RUBBERMAID | PT Astra vs. APPLIED MATERIALS |
| ARISTOCRAT LEISURE vs. TOTAL GABON | ARISTOCRAT LEISURE vs. Walgreens Boots Alliance | ARISTOCRAT LEISURE vs. Peak Resources Limited |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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