Correlation Between Denso Corp and PT Astra
Can any of the company-specific risk be diversified away by investing in both Denso Corp 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 Denso Corp and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Denso Corp ADR and PT Astra International, you can compare the effects of market volatilities on Denso Corp 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 Denso Corp with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Denso Corp and PT Astra.
Diversification Opportunities for Denso Corp and PT Astra
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Denso and PTAIF is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Denso Corp ADR 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 Denso Corp 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 Denso Corp ADR 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 Denso Corp i.e., Denso Corp and PT Astra go up and down completely randomly.
Pair Corralation between Denso Corp and PT Astra
Assuming the 90 days horizon Denso Corp ADR is expected to generate 0.56 times more return on investment than PT Astra. However, Denso Corp ADR is 1.77 times less risky than PT Astra. It trades about -0.02 of its potential returns per unit of risk. PT Astra International is currently generating about -0.01 per unit of risk. If you would invest 1,668 in Denso Corp ADR on September 12, 2024 and sell it today you would lose (246.00) from holding Denso Corp ADR or give up 14.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 48.86% |
| Values | Daily Returns |
Denso Corp ADR vs. PT Astra International
Performance |
| Timeline |
| Denso Corp ADR |
| PT Astra International |
Denso Corp and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Denso Corp and PT Astra
The main advantage of trading using opposite Denso Corp and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Denso Corp 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.| Denso Corp vs. PT Astra International | Denso Corp vs. Astra International Tbk | Denso Corp vs. Mobileye Global Class | Denso Corp vs. HUMANA INC |
| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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