Correlation Between Aptiv PLC and PT Astra
Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and PT Astra 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 Aptiv PLC and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptiv PLC and PT Astra International, you can compare the effects of market volatilities on Aptiv PLC and PT Astra 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 Aptiv PLC with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and PT Astra.
Diversification Opportunities for Aptiv PLC and PT Astra
Average diversification
The 3 months correlation between Aptiv and ASJA is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and PT Astra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Astra International and Aptiv PLC 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 Aptiv PLC are associated (or correlated) with PT Astra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Astra International has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and PT Astra go up and down completely randomly.
Pair Corralation between Aptiv PLC and PT Astra
Assuming the 90 days horizon Aptiv PLC is expected to under-perform the PT Astra. But the stock apears to be less risky and, when comparing its historical volatility, Aptiv PLC is 1.36 times less risky than PT Astra. The stock trades about -0.1 of its potential returns per unit of risk. The PT Astra International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 29.00 in PT Astra International on September 2, 2024 and sell it today you would earn a total of 1.00 from holding PT Astra International or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptiv PLC vs. PT Astra International
Performance |
| Timeline |
| Aptiv PLC |
| PT Astra International |
Aptiv PLC and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptiv PLC and PT Astra
The main advantage of trading using opposite Aptiv PLC and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, PT Astra 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 PT Astra will offset losses from the drop in PT Astra's long position.| Aptiv PLC vs. MGIC INVESTMENT | Aptiv PLC vs. New Residential Investment | Aptiv PLC vs. ACCSYS TECHPLC EO | Aptiv PLC vs. PennyMac Mortgage Investment |
| PT Astra vs. Superior Plus Corp | PT Astra vs. NMI Holdings | PT Astra vs. Origin Agritech | PT Astra vs. SIVERS SEMICONDUCTORS AB |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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