Correlation Between Japfa Comfeed and Astra Otoparts
Can any of the company-specific risk be diversified away by investing in both Japfa Comfeed 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 Japfa Comfeed and Astra Otoparts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japfa Comfeed Indonesia and Astra Otoparts Tbk, you can compare the effects of market volatilities on Japfa Comfeed 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 Japfa Comfeed with a short position of Astra Otoparts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japfa Comfeed and Astra Otoparts.
Diversification Opportunities for Japfa Comfeed and Astra Otoparts
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Japfa and Astra is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Japfa Comfeed Indonesia 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 Japfa Comfeed 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 Japfa Comfeed Indonesia 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 Japfa Comfeed i.e., Japfa Comfeed and Astra Otoparts go up and down completely randomly.
Pair Corralation between Japfa Comfeed and Astra Otoparts
Assuming the 90 days trading horizon Japfa Comfeed Indonesia is expected to generate 1.06 times more return on investment than Astra Otoparts. However, Japfa Comfeed is 1.06 times more volatile than Astra Otoparts Tbk. It trades about -0.05 of its potential returns per unit of risk. Astra Otoparts Tbk is currently generating about -0.2 per unit of risk. If you would invest 175,000 in Japfa Comfeed Indonesia on September 2, 2024 and sell it today you would lose (3,500) from holding Japfa Comfeed Indonesia or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japfa Comfeed Indonesia vs. Astra Otoparts Tbk
Performance |
| Timeline |
| Japfa Comfeed Indonesia |
| Astra Otoparts Tbk |
Japfa Comfeed and Astra Otoparts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japfa Comfeed and Astra Otoparts
The main advantage of trading using opposite Japfa Comfeed and Astra Otoparts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japfa Comfeed 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.| Japfa Comfeed vs. Bank BRISyariah Tbk | Japfa Comfeed vs. Mitra Pinasthika Mustika | Japfa Comfeed vs. Jakarta Int Hotels | Japfa Comfeed vs. Indosterling Technomedia Tbk |
| Astra Otoparts vs. Japfa Comfeed Indonesia | Astra Otoparts vs. Charoen Pokphand Indonesia | Astra Otoparts vs. Erajaya Swasembada Tbk | Astra Otoparts vs. Indofood Cbp Sukses |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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