Correlation Between Indomobil Sukses and Astra Otoparts
Can any of the company-specific risk be diversified away by investing in both Indomobil Sukses 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 Indomobil Sukses and Astra Otoparts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indomobil Sukses Internasional and Astra Otoparts Tbk, you can compare the effects of market volatilities on Indomobil Sukses 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 Indomobil Sukses with a short position of Astra Otoparts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indomobil Sukses and Astra Otoparts.
Diversification Opportunities for Indomobil Sukses and Astra Otoparts
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indomobil and Astra is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Indomobil Sukses Internasional 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 Indomobil Sukses 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 Indomobil Sukses Internasional 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 Indomobil Sukses i.e., Indomobil Sukses and Astra Otoparts go up and down completely randomly.
Pair Corralation between Indomobil Sukses and Astra Otoparts
Assuming the 90 days trading horizon Indomobil Sukses Internasional is expected to under-perform the Astra Otoparts. In addition to that, Indomobil Sukses is 1.82 times more volatile than Astra Otoparts Tbk. It trades about -0.37 of its total potential returns per unit of risk. Astra Otoparts Tbk is currently generating about -0.26 per unit of volatility. If you would invest 255,000 in Astra Otoparts Tbk on August 29, 2024 and sell it today you would lose (23,000) from holding Astra Otoparts Tbk or give up 9.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indomobil Sukses Internasional vs. Astra Otoparts Tbk
Performance |
| Timeline |
| Indomobil Sukses Int |
| Astra Otoparts Tbk |
Indomobil Sukses and Astra Otoparts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indomobil Sukses and Astra Otoparts
The main advantage of trading using opposite Indomobil Sukses and Astra Otoparts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indomobil Sukses 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.| Indomobil Sukses vs. Gajah Tunggal Tbk | Indomobil Sukses vs. Astra Otoparts Tbk | Indomobil Sukses vs. Harum Energy Tbk | Indomobil Sukses vs. Akr Corporindo Tbk |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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