Correlation Between LKQ and PT Astra
Can any of the company-specific risk be diversified away by investing in both LKQ and PT Astra 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 LKQ and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LKQ Corporation and PT Astra International, you can compare the effects of market volatilities on LKQ and PT Astra 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 LKQ with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of LKQ and PT Astra.
Diversification Opportunities for LKQ and PT Astra
Good diversification
The 3 months correlation between LKQ and ASJA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding LKQ Corp. and PT Astra International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Astra International and LKQ 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 LKQ Corporation are associated (or correlated) with PT Astra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Astra International has no effect on the direction of LKQ i.e., LKQ and PT Astra go up and down completely randomly.
Pair Corralation between LKQ and PT Astra
Assuming the 90 days trading horizon LKQ is expected to generate 7.21 times less return on investment than PT Astra. But when comparing it to its historical volatility, LKQ Corporation is 2.37 times less risky than PT Astra. It trades about 0.01 of its potential returns per unit of risk. PT Astra International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 29.00 in PT Astra International on September 2, 2024 and sell it today you would earn a total of 1.00 from holding PT Astra International or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LKQ Corp. vs. PT Astra International
Performance |
| Timeline |
| LKQ Corporation |
| PT Astra International |
LKQ and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LKQ and PT Astra
The main advantage of trading using opposite LKQ and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LKQ position performs unexpectedly, PT Astra 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 PT Astra will offset losses from the drop in PT Astra's long position.| LKQ vs. Gladstone Investment | LKQ vs. Genco Shipping Trading | LKQ vs. SEI INVESTMENTS | LKQ vs. Strategic Investments AS |
| PT Astra vs. Superior Plus Corp | PT Astra vs. NMI Holdings | PT Astra vs. Origin Agritech | PT Astra vs. SIVERS SEMICONDUCTORS AB |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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