Correlation Between Astra Otoparts and Hexindo Adiperkasa
Can any of the company-specific risk be diversified away by investing in both Astra Otoparts and Hexindo Adiperkasa 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 Hexindo Adiperkasa 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 Hexindo Adiperkasa Tbk, you can compare the effects of market volatilities on Astra Otoparts and Hexindo Adiperkasa 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 Hexindo Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Otoparts and Hexindo Adiperkasa.
Diversification Opportunities for Astra Otoparts and Hexindo Adiperkasa
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Astra and Hexindo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Astra Otoparts Tbk and Hexindo Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexindo Adiperkasa 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 Hexindo Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexindo Adiperkasa Tbk has no effect on the direction of Astra Otoparts i.e., Astra Otoparts and Hexindo Adiperkasa go up and down completely randomly.
Pair Corralation between Astra Otoparts and Hexindo Adiperkasa
Assuming the 90 days trading horizon Astra Otoparts Tbk is expected to generate 1.67 times more return on investment than Hexindo Adiperkasa. However, Astra Otoparts is 1.67 times more volatile than Hexindo Adiperkasa Tbk. It trades about 0.01 of its potential returns per unit of risk. Hexindo Adiperkasa Tbk is currently generating about -0.06 per unit of risk. If you would invest 204,718 in Astra Otoparts Tbk on November 5, 2024 and sell it today you would earn a total of 282.00 from holding Astra Otoparts Tbk or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Otoparts Tbk vs. Hexindo Adiperkasa Tbk
Performance |
| Timeline |
| Astra Otoparts Tbk |
| Hexindo Adiperkasa Tbk |
Astra Otoparts and Hexindo Adiperkasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Otoparts and Hexindo Adiperkasa
The main advantage of trading using opposite Astra Otoparts and Hexindo Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Otoparts position performs unexpectedly, Hexindo Adiperkasa 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 Hexindo Adiperkasa will offset losses from the drop in Hexindo Adiperkasa'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 |
| Hexindo Adiperkasa vs. Bisi International Tbk | Hexindo Adiperkasa vs. Sampoerna Agro Tbk | Hexindo Adiperkasa vs. Akr Corporindo Tbk | Hexindo Adiperkasa vs. Solusi Bangun 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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