Correlation Between PT Astra and VeriSign
Can any of the company-specific risk be diversified away by investing in both PT Astra and VeriSign 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 VeriSign 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 VeriSign, you can compare the effects of market volatilities on PT Astra and VeriSign 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 VeriSign. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and VeriSign.
Diversification Opportunities for PT Astra and VeriSign
Very good diversification
The 3 months correlation between ASJA and VeriSign is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and VeriSign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VeriSign 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 VeriSign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VeriSign has no effect on the direction of PT Astra i.e., PT Astra and VeriSign go up and down completely randomly.
Pair Corralation between PT Astra and VeriSign
Assuming the 90 days trading horizon PT Astra International is expected to generate 3.26 times more return on investment than VeriSign. However, PT Astra is 3.26 times more volatile than VeriSign. It trades about 0.01 of its potential returns per unit of risk. VeriSign is currently generating about -0.01 per unit of risk. If you would invest 34.00 in PT Astra International on August 29, 2024 and sell it today you would lose (5.00) from holding PT Astra International or give up 14.71% 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. VeriSign
Performance |
| Timeline |
| PT Astra International |
| VeriSign |
PT Astra and VeriSign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and VeriSign
The main advantage of trading using opposite PT Astra and VeriSign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, VeriSign 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 VeriSign will offset losses from the drop in VeriSign's long position.| PT Astra vs. Lion One Metals | PT Astra vs. UNITED RENTALS | PT Astra vs. PLAY2CHILL SA ZY | PT Astra vs. VIAPLAY GROUP AB |
| VeriSign vs. SCANDMEDICAL SOLDK 040 | VeriSign vs. Beyond Meat | VeriSign vs. MeVis Medical Solutions | VeriSign vs. Advanced Medical Solutions |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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