Correlation Between PT Astra and LKQ
Can any of the company-specific risk be diversified away by investing in both PT Astra and LKQ 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 LKQ 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 LKQ Corporation, you can compare the effects of market volatilities on PT Astra and LKQ 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 LKQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and LKQ.
Diversification Opportunities for PT Astra and LKQ
Good diversification
The 3 months correlation between ASJA and LKQ is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and LKQ Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LKQ Corporation 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 LKQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LKQ Corporation has no effect on the direction of PT Astra i.e., PT Astra and LKQ go up and down completely randomly.
Pair Corralation between PT Astra and LKQ
Assuming the 90 days trading horizon PT Astra International is expected to generate 2.67 times more return on investment than LKQ. However, PT Astra is 2.67 times more volatile than LKQ Corporation. It trades about 0.02 of its potential returns per unit of risk. LKQ Corporation is currently generating about -0.02 per unit of risk. If you would invest 33.00 in PT Astra International on September 2, 2024 and sell it today you would lose (3.00) from holding PT Astra International or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. LKQ Corp.
Performance |
| Timeline |
| PT Astra International |
| LKQ Corporation |
PT Astra and LKQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and LKQ
The main advantage of trading using opposite PT Astra and LKQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, LKQ 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 LKQ will offset losses from the drop in LKQ'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 |
| LKQ vs. Gladstone Investment | LKQ vs. Genco Shipping Trading | LKQ vs. SEI INVESTMENTS | LKQ vs. Strategic Investments AS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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