Correlation Between PT Astra and Aptiv PLC
Can any of the company-specific risk be diversified away by investing in both PT Astra and Aptiv PLC 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 Aptiv PLC 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 Aptiv PLC, you can compare the effects of market volatilities on PT Astra and Aptiv PLC 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 Aptiv PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Aptiv PLC.
Diversification Opportunities for PT Astra and Aptiv PLC
Average diversification
The 3 months correlation between ASJA and Aptiv is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Aptiv PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptiv PLC 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 Aptiv PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptiv PLC has no effect on the direction of PT Astra i.e., PT Astra and Aptiv PLC go up and down completely randomly.
Pair Corralation between PT Astra and Aptiv PLC
Assuming the 90 days trading horizon PT Astra International is expected to under-perform the Aptiv PLC. In addition to that, PT Astra is 1.48 times more volatile than Aptiv PLC. It trades about -0.06 of its total potential returns per unit of risk. Aptiv PLC is currently generating about 0.04 per unit of volatility. If you would invest 5,177 in Aptiv PLC on September 2, 2024 and sell it today you would earn a total of 67.00 from holding Aptiv PLC or generate 1.29% 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. Aptiv PLC
Performance |
| Timeline |
| PT Astra International |
| Aptiv PLC |
PT Astra and Aptiv PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Aptiv PLC
The main advantage of trading using opposite PT Astra and Aptiv PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Aptiv PLC 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 Aptiv PLC will offset losses from the drop in Aptiv PLC's long position.| PT Astra vs. Superior Plus Corp | PT Astra vs. NMI Holdings | PT Astra vs. Origin Agritech | PT Astra vs. SIVERS SEMICONDUCTORS AB |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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