Correlation Between Astra Otoparts and Selamat Sempurna
Can any of the company-specific risk be diversified away by investing in both Astra Otoparts and Selamat Sempurna 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 Selamat Sempurna 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 Selamat Sempurna Tbk, you can compare the effects of market volatilities on Astra Otoparts and Selamat Sempurna 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 Selamat Sempurna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Otoparts and Selamat Sempurna.
Diversification Opportunities for Astra Otoparts and Selamat Sempurna
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Astra and Selamat is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Astra Otoparts Tbk and Selamat Sempurna Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selamat Sempurna 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 Selamat Sempurna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selamat Sempurna Tbk has no effect on the direction of Astra Otoparts i.e., Astra Otoparts and Selamat Sempurna go up and down completely randomly.
Pair Corralation between Astra Otoparts and Selamat Sempurna
Assuming the 90 days trading horizon Astra Otoparts Tbk is expected to under-perform the Selamat Sempurna. In addition to that, Astra Otoparts is 1.21 times more volatile than Selamat Sempurna Tbk. It trades about -0.27 of its total potential returns per unit of risk. Selamat Sempurna Tbk is currently generating about -0.02 per unit of volatility. If you would invest 190,889 in Selamat Sempurna Tbk on August 29, 2024 and sell it today you would lose (1,389) from holding Selamat Sempurna Tbk or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra Otoparts Tbk vs. Selamat Sempurna Tbk
Performance |
| Timeline |
| Astra Otoparts Tbk |
| Selamat Sempurna Tbk |
Astra Otoparts and Selamat Sempurna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Otoparts and Selamat Sempurna
The main advantage of trading using opposite Astra Otoparts and Selamat Sempurna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Otoparts position performs unexpectedly, Selamat Sempurna 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 Selamat Sempurna will offset losses from the drop in Selamat Sempurna'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 |
| Selamat Sempurna vs. Surya Citra Media | Selamat Sempurna vs. Astra Otoparts Tbk | Selamat Sempurna vs. Ultra Jaya Milk | Selamat Sempurna vs. Ramayana Lestari Sentosa |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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