Correlation Between Astra Otoparts and Jembo Cable
Can any of the company-specific risk be diversified away by investing in both Astra Otoparts and Jembo Cable 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 Jembo Cable 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 Jembo Cable, you can compare the effects of market volatilities on Astra Otoparts and Jembo Cable 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 Jembo Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Otoparts and Jembo Cable.
Diversification Opportunities for Astra Otoparts and Jembo Cable
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astra and Jembo is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Astra Otoparts Tbk and Jembo Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jembo Cable 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 Jembo Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jembo Cable has no effect on the direction of Astra Otoparts i.e., Astra Otoparts and Jembo Cable go up and down completely randomly.
Pair Corralation between Astra Otoparts and Jembo Cable
Assuming the 90 days trading horizon Astra Otoparts Tbk is expected to generate 1.69 times more return on investment than Jembo Cable. However, Astra Otoparts is 1.69 times more volatile than Jembo Cable. It trades about 0.02 of its potential returns per unit of risk. Jembo Cable is currently generating about -0.15 per unit of risk. If you would invest 204,000 in Astra Otoparts Tbk on November 27, 2024 and sell it today you would earn a total of 1,000.00 from holding Astra Otoparts Tbk or generate 0.49% 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. Jembo Cable
Performance |
| Timeline |
| Astra Otoparts Tbk |
| Jembo Cable |
Astra Otoparts and Jembo Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Otoparts and Jembo Cable
The main advantage of trading using opposite Astra Otoparts and Jembo Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Otoparts position performs unexpectedly, Jembo Cable 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 Jembo Cable will offset losses from the drop in Jembo Cable'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 |
| Jembo Cable vs. Kabelindo Murni Tbk | Jembo Cable vs. Sumi Indo Kabel | Jembo Cable vs. Kmi Wire And | Jembo Cable vs. Indospring 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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