Correlation Between Astra Otoparts and Goodyear Indonesia
Can any of the company-specific risk be diversified away by investing in both Astra Otoparts and Goodyear Indonesia 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 Goodyear Indonesia 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 Goodyear Indonesia Tbk, you can compare the effects of market volatilities on Astra Otoparts and Goodyear Indonesia 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 Goodyear Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Otoparts and Goodyear Indonesia.
Diversification Opportunities for Astra Otoparts and Goodyear Indonesia
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and Goodyear is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Astra Otoparts Tbk and Goodyear Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodyear Indonesia Tbk 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 Goodyear Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodyear Indonesia Tbk has no effect on the direction of Astra Otoparts i.e., Astra Otoparts and Goodyear Indonesia go up and down completely randomly.
Pair Corralation between Astra Otoparts and Goodyear Indonesia
Assuming the 90 days trading horizon Astra Otoparts Tbk is expected to generate 1.2 times more return on investment than Goodyear Indonesia. However, Astra Otoparts is 1.2 times more volatile than Goodyear Indonesia Tbk. It trades about 0.09 of its potential returns per unit of risk. Goodyear Indonesia Tbk is currently generating about 0.0 per unit of risk. If you would invest 186,875 in Astra Otoparts Tbk on August 25, 2024 and sell it today you would earn a total of 46,125 from holding Astra Otoparts Tbk or generate 24.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Otoparts Tbk vs. Goodyear Indonesia Tbk
Performance |
| Timeline |
| Astra Otoparts Tbk |
| Goodyear Indonesia Tbk |
Astra Otoparts and Goodyear Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Otoparts and Goodyear Indonesia
The main advantage of trading using opposite Astra Otoparts and Goodyear Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Otoparts position performs unexpectedly, Goodyear Indonesia 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 Goodyear Indonesia will offset losses from the drop in Goodyear Indonesia'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 |
| Goodyear Indonesia vs. Indo Kordsa Tbk | Goodyear Indonesia vs. Indospring Tbk | Goodyear Indonesia vs. Sepatu Bata Tbk | Goodyear Indonesia vs. Astra Otoparts Tbk |
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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