Correlation Between PT Astra and Dno ASA
Can any of the company-specific risk be diversified away by investing in both PT Astra and Dno ASA 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 Dno ASA 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 Dno ASA, you can compare the effects of market volatilities on PT Astra and Dno ASA 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 Dno ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Dno ASA.
Diversification Opportunities for PT Astra and Dno ASA
Very good diversification
The 3 months correlation between ASJA and Dno is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Dno ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dno ASA 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 Dno ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dno ASA has no effect on the direction of PT Astra i.e., PT Astra and Dno ASA go up and down completely randomly.
Pair Corralation between PT Astra and Dno ASA
Assuming the 90 days trading horizon PT Astra International is expected to generate 2.35 times more return on investment than Dno ASA. However, PT Astra is 2.35 times more volatile than Dno ASA. It trades about 0.01 of its potential returns per unit of risk. Dno ASA is currently generating about 0.01 per unit of risk. If you would invest 29.00 in PT Astra International on November 2, 2024 and sell it today you would lose (1.00) from holding PT Astra International or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
PT Astra International vs. Dno ASA
Performance |
| Timeline |
| PT Astra International |
| Dno ASA |
PT Astra and Dno ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Dno ASA
The main advantage of trading using opposite PT Astra and Dno ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Dno ASA 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 Dno ASA will offset losses from the drop in Dno ASA's 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 |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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