Correlation Between Gozco Plantations and Astra International
Can any of the company-specific risk be diversified away by investing in both Gozco Plantations and Astra International 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 Gozco Plantations and Astra International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gozco Plantations Tbk and Astra International Tbk, you can compare the effects of market volatilities on Gozco Plantations and Astra International 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 Gozco Plantations with a short position of Astra International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gozco Plantations and Astra International.
Diversification Opportunities for Gozco Plantations and Astra International
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gozco and Astra is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gozco Plantations Tbk and Astra International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra International Tbk and Gozco Plantations 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 Gozco Plantations Tbk are associated (or correlated) with Astra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra International Tbk has no effect on the direction of Gozco Plantations i.e., Gozco Plantations and Astra International go up and down completely randomly.
Pair Corralation between Gozco Plantations and Astra International
Assuming the 90 days trading horizon Gozco Plantations is expected to generate 13.7 times less return on investment than Astra International. In addition to that, Gozco Plantations is 1.02 times more volatile than Astra International Tbk. It trades about 0.01 of its total potential returns per unit of risk. Astra International Tbk is currently generating about 0.13 per unit of volatility. If you would invest 497,000 in Astra International Tbk on September 12, 2024 and sell it today you would earn a total of 23,000 from holding Astra International Tbk or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gozco Plantations Tbk vs. Astra International Tbk
Performance |
| Timeline |
| Gozco Plantations Tbk |
| Astra International Tbk |
Gozco Plantations and Astra International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gozco Plantations and Astra International
The main advantage of trading using opposite Gozco Plantations and Astra International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gozco Plantations position performs unexpectedly, Astra International 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 International will offset losses from the drop in Astra International's long position.| Gozco Plantations vs. Sampoerna Agro Tbk | Gozco Plantations vs. Tunas Baru Lampung | Gozco Plantations vs. Bakrie Sumatera Plantations | Gozco Plantations vs. Bisi International Tbk |
| Astra International vs. Pembangunan Graha Lestari | Astra International vs. Pembangunan Jaya Ancol | Astra International vs. Hotel Sahid Jaya | Astra International vs. Mitrabara Adiperdana PT |
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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