Correlation Between PT Astra and Agricultural Bank
Can any of the company-specific risk be diversified away by investing in both PT Astra and Agricultural Bank 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 PT Astra and Agricultural Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Astra International and Agricultural Bank of, you can compare the effects of market volatilities on PT Astra and Agricultural Bank 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 PT Astra with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Agricultural Bank.
Diversification Opportunities for PT Astra and Agricultural Bank
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PTAIF and Agricultural is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and PT Astra 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 PT Astra International are associated (or correlated) with Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of PT Astra i.e., PT Astra and Agricultural Bank go up and down completely randomly.
Pair Corralation between PT Astra and Agricultural Bank
If you would invest 1,232 in Agricultural Bank of on August 31, 2024 and sell it today you would earn a total of 16.00 from holding Agricultural Bank of or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. Agricultural Bank of
Performance |
| Timeline |
| PT Astra International |
| Agricultural Bank |
PT Astra and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Agricultural Bank
The main advantage of trading using opposite PT Astra and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Agricultural Bank 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 Agricultural Bank will offset losses from the drop in Agricultural Bank's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
| Agricultural Bank vs. Bank of America | Agricultural Bank vs. Bank of America | Agricultural Bank vs. Bank of America | Agricultural Bank vs. China Construction Bank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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