Correlation Between Astra Otoparts and Indospring Tbk
Can any of the company-specific risk be diversified away by investing in both Astra Otoparts and Indospring Tbk 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 Indospring Tbk 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 Indospring Tbk, you can compare the effects of market volatilities on Astra Otoparts and Indospring Tbk 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 Indospring Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Otoparts and Indospring Tbk.
Diversification Opportunities for Astra Otoparts and Indospring Tbk
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and Indospring is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Astra Otoparts Tbk and Indospring Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indospring 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 Indospring Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indospring Tbk has no effect on the direction of Astra Otoparts i.e., Astra Otoparts and Indospring Tbk go up and down completely randomly.
Pair Corralation between Astra Otoparts and Indospring Tbk
Assuming the 90 days trading horizon Astra Otoparts Tbk is expected to generate 1.04 times more return on investment than Indospring Tbk. However, Astra Otoparts is 1.04 times more volatile than Indospring Tbk. It trades about -0.26 of its potential returns per unit of risk. Indospring Tbk is currently generating about -0.36 per unit of risk. If you would invest 255,000 in Astra Otoparts Tbk on August 29, 2024 and sell it today you would lose (23,000) from holding Astra Otoparts Tbk or give up 9.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Otoparts Tbk vs. Indospring Tbk
Performance |
| Timeline |
| Astra Otoparts Tbk |
| Indospring Tbk |
Astra Otoparts and Indospring Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Otoparts and Indospring Tbk
The main advantage of trading using opposite Astra Otoparts and Indospring Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Otoparts position performs unexpectedly, Indospring Tbk 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 Indospring Tbk will offset losses from the drop in Indospring Tbk'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 |
| Indospring Tbk vs. Indomobil Sukses Internasional | Indospring Tbk vs. Goodyear Indonesia Tbk | Indospring Tbk vs. Indorama Synthetics Tbk | Indospring Tbk 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |