Correlation Between Ever Shine and Astra Otoparts
Can any of the company-specific risk be diversified away by investing in both Ever Shine and Astra Otoparts 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 Ever Shine and Astra Otoparts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ever Shine Textile and Astra Otoparts Tbk, you can compare the effects of market volatilities on Ever Shine and Astra Otoparts 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 Ever Shine with a short position of Astra Otoparts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ever Shine and Astra Otoparts.
Diversification Opportunities for Ever Shine and Astra Otoparts
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ever and Astra is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ever Shine Textile and Astra Otoparts Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Otoparts Tbk and Ever Shine 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 Ever Shine Textile are associated (or correlated) with Astra Otoparts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Otoparts Tbk has no effect on the direction of Ever Shine i.e., Ever Shine and Astra Otoparts go up and down completely randomly.
Pair Corralation between Ever Shine and Astra Otoparts
Assuming the 90 days trading horizon Ever Shine Textile is expected to generate 2.1 times more return on investment than Astra Otoparts. However, Ever Shine is 2.1 times more volatile than Astra Otoparts Tbk. It trades about -0.02 of its potential returns per unit of risk. Astra Otoparts Tbk is currently generating about -0.23 per unit of risk. If you would invest 4,500 in Ever Shine Textile on September 1, 2024 and sell it today you would lose (100.00) from holding Ever Shine Textile or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ever Shine Textile vs. Astra Otoparts Tbk
Performance |
| Timeline |
| Ever Shine Textile |
| Astra Otoparts Tbk |
Ever Shine and Astra Otoparts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ever Shine and Astra Otoparts
The main advantage of trading using opposite Ever Shine and Astra Otoparts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ever Shine position performs unexpectedly, Astra Otoparts 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 Otoparts will offset losses from the drop in Astra Otoparts' long position.| Ever Shine vs. Japfa Comfeed Indonesia | Ever Shine vs. Charoen Pokphand Indonesia | Ever Shine vs. Erajaya Swasembada Tbk | Ever Shine vs. Indofood Cbp Sukses |
| Astra Otoparts vs. Gajah Tunggal Tbk | Astra Otoparts vs. Astra Graphia Tbk | Astra Otoparts vs. Indomobil Sukses Internasional | Astra Otoparts vs. Astra Agro Lestari |
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 CEOs Directory module to screen CEOs from public companies around the world.
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