Correlation Between Indosat Tbk and Astra Agro
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Astra Agro 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 Indosat Tbk and Astra Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Astra Agro Lestari, you can compare the effects of market volatilities on Indosat Tbk and Astra Agro 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 Indosat Tbk with a short position of Astra Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Astra Agro.
Diversification Opportunities for Indosat Tbk and Astra Agro
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indosat and Astra is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Astra Agro Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Agro Lestari and Indosat Tbk 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 Indosat Tbk are associated (or correlated) with Astra Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Agro Lestari has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Astra Agro go up and down completely randomly.
Pair Corralation between Indosat Tbk and Astra Agro
Assuming the 90 days trading horizon Indosat Tbk is expected to generate 3.54 times more return on investment than Astra Agro. However, Indosat Tbk is 3.54 times more volatile than Astra Agro Lestari. It trades about 0.08 of its potential returns per unit of risk. Astra Agro Lestari is currently generating about -0.33 per unit of risk. If you would invest 232,000 in Indosat Tbk on August 30, 2024 and sell it today you would earn a total of 12,000 from holding Indosat Tbk or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. Astra Agro Lestari
Performance |
| Timeline |
| Indosat Tbk |
| Astra Agro Lestari |
Indosat Tbk and Astra Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Astra Agro
The main advantage of trading using opposite Indosat Tbk and Astra Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Astra Agro 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 Agro will offset losses from the drop in Astra Agro's long position.| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
| Astra Agro vs. Perusahaan Perkebunan London | Astra Agro vs. United Tractors Tbk | Astra Agro vs. Vale Indonesia Tbk | Astra Agro vs. Astra International Tbk |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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