Correlation Between PT Astra and Lion One
Can any of the company-specific risk be diversified away by investing in both PT Astra and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on PT Astra and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Lion One.
Diversification Opportunities for PT Astra and Lion One
Average diversification
The 3 months correlation between ASJA and Lion is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of PT Astra i.e., PT Astra and Lion One go up and down completely randomly.
Pair Corralation between PT Astra and Lion One
Assuming the 90 days trading horizon PT Astra International is expected to generate 1.15 times more return on investment than Lion One. However, PT Astra is 1.15 times more volatile than Lion One Metals. It trades about 0.06 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.04 per unit of risk. If you would invest 29.00 in PT Astra International on September 1, 2024 and sell it today you would earn a total of 1.00 from holding PT Astra International or generate 3.45% 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. Lion One Metals
Performance |
| Timeline |
| PT Astra International |
| Lion One Metals |
PT Astra and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Lion One
The main advantage of trading using opposite PT Astra and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| PT Astra vs. UNIVERSAL MUSIC GROUP | PT Astra vs. Pembina Pipeline Corp | PT Astra vs. CHEMICAL INDUSTRIES | PT Astra vs. UNIVMUSIC GRPADR050 |
| Lion One vs. NIPPON STEEL SPADR | Lion One vs. United States Steel | Lion One vs. Nippon Steel | Lion One vs. Singapore Telecommunications 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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