Correlation Between Astra Otoparts and Adira Dinamika
Can any of the company-specific risk be diversified away by investing in both Astra Otoparts and Adira Dinamika 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 Astra Otoparts and Adira Dinamika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Otoparts Tbk and Adira Dinamika Multi, you can compare the effects of market volatilities on Astra Otoparts and Adira Dinamika 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 Astra Otoparts with a short position of Adira Dinamika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Otoparts and Adira Dinamika.
Diversification Opportunities for Astra Otoparts and Adira Dinamika
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Astra and Adira is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Astra Otoparts Tbk and Adira Dinamika Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adira Dinamika Multi and Astra Otoparts 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 Astra Otoparts Tbk are associated (or correlated) with Adira Dinamika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adira Dinamika Multi has no effect on the direction of Astra Otoparts i.e., Astra Otoparts and Adira Dinamika go up and down completely randomly.
Pair Corralation between Astra Otoparts and Adira Dinamika
Assuming the 90 days trading horizon Astra Otoparts Tbk is expected to generate 1.76 times more return on investment than Adira Dinamika. However, Astra Otoparts is 1.76 times more volatile than Adira Dinamika Multi. It trades about 0.06 of its potential returns per unit of risk. Adira Dinamika Multi is currently generating about 0.02 per unit of risk. If you would invest 115,156 in Astra Otoparts Tbk on November 4, 2024 and sell it today you would earn a total of 89,844 from holding Astra Otoparts Tbk or generate 78.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Otoparts Tbk vs. Adira Dinamika Multi
Performance |
| Timeline |
| Astra Otoparts Tbk |
| Adira Dinamika Multi |
Astra Otoparts and Adira Dinamika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Otoparts and Adira Dinamika
The main advantage of trading using opposite Astra Otoparts and Adira Dinamika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Otoparts position performs unexpectedly, Adira Dinamika 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 Adira Dinamika will offset losses from the drop in Adira Dinamika's long position.| Astra Otoparts vs. Gajah Tunggal Tbk | Astra Otoparts vs. Astra Graphia Tbk | Astra Otoparts vs. Indomobil Sukses Internasional | Astra Otoparts vs. Astra Agro Lestari |
| Adira Dinamika vs. BFI Finance Indonesia | Adira Dinamika vs. Clipan Finance Indonesia | Adira Dinamika vs. Astra Otoparts Tbk | Adira Dinamika vs. Bank Danamon Indonesia |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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