Correlation Between Astra Otoparts and Gajah Tunggal
Can any of the company-specific risk be diversified away by investing in both Astra Otoparts and Gajah Tunggal 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 Gajah Tunggal 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 Gajah Tunggal Tbk, you can compare the effects of market volatilities on Astra Otoparts and Gajah Tunggal 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 Gajah Tunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Otoparts and Gajah Tunggal.
Diversification Opportunities for Astra Otoparts and Gajah Tunggal
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astra and Gajah is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Astra Otoparts Tbk and Gajah Tunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gajah Tunggal 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 Gajah Tunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gajah Tunggal Tbk has no effect on the direction of Astra Otoparts i.e., Astra Otoparts and Gajah Tunggal go up and down completely randomly.
Pair Corralation between Astra Otoparts and Gajah Tunggal
Assuming the 90 days trading horizon Astra Otoparts is expected to generate 4.43 times less return on investment than Gajah Tunggal. But when comparing it to its historical volatility, Astra Otoparts Tbk is 1.23 times less risky than Gajah Tunggal. It trades about 0.01 of its potential returns per unit of risk. Gajah Tunggal Tbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 99,188 in Gajah Tunggal Tbk on November 5, 2024 and sell it today you would earn a total of 16,312 from holding Gajah Tunggal Tbk or generate 16.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Otoparts Tbk vs. Gajah Tunggal Tbk
Performance |
| Timeline |
| Astra Otoparts Tbk |
| Gajah Tunggal Tbk |
Astra Otoparts and Gajah Tunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Otoparts and Gajah Tunggal
The main advantage of trading using opposite Astra Otoparts and Gajah Tunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Otoparts position performs unexpectedly, Gajah Tunggal 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 Gajah Tunggal will offset losses from the drop in Gajah Tunggal'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 |
| Gajah Tunggal vs. Perusahaan Perkebunan London | Gajah Tunggal vs. Solusi Bangun Indonesia | Gajah Tunggal vs. Ciputra Development Tbk | Gajah Tunggal vs. Global Mediacom 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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