Correlation Between Bank Central and Astra Graphia
Can any of the company-specific risk be diversified away by investing in both Bank Central and Astra Graphia 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 Bank Central and Astra Graphia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Astra Graphia Tbk, you can compare the effects of market volatilities on Bank Central and Astra Graphia 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 Bank Central with a short position of Astra Graphia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Astra Graphia.
Diversification Opportunities for Bank Central and Astra Graphia
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Astra is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Astra Graphia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Graphia Tbk and Bank Central 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 Bank Central Asia are associated (or correlated) with Astra Graphia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Graphia Tbk has no effect on the direction of Bank Central i.e., Bank Central and Astra Graphia go up and down completely randomly.
Pair Corralation between Bank Central and Astra Graphia
Assuming the 90 days trading horizon Bank Central Asia is expected to generate 1.24 times more return on investment than Astra Graphia. However, Bank Central is 1.24 times more volatile than Astra Graphia Tbk. It trades about 0.0 of its potential returns per unit of risk. Astra Graphia Tbk is currently generating about 0.0 per unit of risk. If you would invest 953,172 in Bank Central Asia on November 5, 2024 and sell it today you would lose (8,172) from holding Bank Central Asia or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Astra Graphia Tbk
Performance |
| Timeline |
| Bank Central Asia |
| Astra Graphia Tbk |
Bank Central and Astra Graphia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Astra Graphia
The main advantage of trading using opposite Bank Central and Astra Graphia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Astra Graphia 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 Astra Graphia will offset losses from the drop in Astra Graphia's long position.| Bank Central vs. Bank Rakyat Indonesia | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Bank Negara Indonesia | Bank Central vs. Astra International Tbk |
| Astra Graphia vs. Astra Otoparts Tbk | Astra Graphia vs. Citra Marga Nusaphala | Astra Graphia vs. Hexindo Adiperkasa Tbk | Astra Graphia vs. Metrodata Electronics 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |