Correlation Between PT Astra and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both PT Astra and SBI Insurance 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 SBI Insurance 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 SBI Insurance Group, you can compare the effects of market volatilities on PT Astra and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and SBI Insurance.
Diversification Opportunities for PT Astra and SBI Insurance
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between ASJA and SBI is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of PT Astra i.e., PT Astra and SBI Insurance go up and down completely randomly.
Pair Corralation between PT Astra and SBI Insurance
Assuming the 90 days trading horizon PT Astra International is expected to generate 2.38 times more return on investment than SBI Insurance. However, PT Astra is 2.38 times more volatile than SBI Insurance Group. It trades about 0.02 of its potential returns per unit of risk. SBI Insurance Group is currently generating about 0.01 per unit of risk. If you would invest 33.00 in PT Astra International on September 12, 2024 and sell it today you would earn a total of 0.00 from holding PT Astra International or generate 0.0% 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. SBI Insurance Group
Performance |
| Timeline |
| PT Astra International |
| SBI Insurance Group |
PT Astra and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and SBI Insurance
The main advantage of trading using opposite PT Astra and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| PT Astra vs. Brockhaus Capital Management | PT Astra vs. ITALIAN WINE BRANDS | PT Astra vs. LANDSEA GREEN MANAGEMENT | PT Astra vs. Marie Brizard Wine |
| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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