Correlation Between Lion One and PT Astra
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and PT Astra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and PT Astra International, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of PT Astra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and PT Astra.
Diversification Opportunities for Lion One and PT Astra
Average diversification
The 3 months correlation between Lion and ASJA is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and PT Astra go up and down completely randomly.
Pair Corralation between Lion One and PT Astra
Assuming the 90 days horizon Lion One Metals is expected to under-perform the PT Astra. In addition to that, Lion One is 1.07 times more volatile than PT Astra International. It trades about -0.02 of its total potential returns per unit of risk. PT Astra International is currently generating about 0.0 per unit of volatility. If you would invest 41.00 in PT Astra International on September 1, 2024 and sell it today you would lose (11.00) from holding PT Astra International or give up 26.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. PT Astra International
Performance |
| Timeline |
| Lion One Metals |
| PT Astra International |
Lion One and PT Astra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and PT Astra
The main advantage of trading using opposite Lion One and PT Astra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. NIPPON STEEL SPADR | Lion One vs. United States Steel | Lion One vs. Nippon Steel | Lion One vs. Singapore Telecommunications Limited |
| PT Astra vs. UNIVERSAL MUSIC GROUP | PT Astra vs. Pembina Pipeline Corp | PT Astra vs. CHEMICAL INDUSTRIES | PT Astra vs. UNIVMUSIC GRPADR050 |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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