Correlation Between PT Astra and American Acquisition
Can any of the company-specific risk be diversified away by investing in both PT Astra and American Acquisition 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 American Acquisition 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 American Acquisition Opportunity, you can compare the effects of market volatilities on PT Astra and American Acquisition 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 American Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and American Acquisition.
Diversification Opportunities for PT Astra and American Acquisition
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTAIF and American is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and American Acquisition Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Acquisition 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 American Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Acquisition has no effect on the direction of PT Astra i.e., PT Astra and American Acquisition go up and down completely randomly.
Pair Corralation between PT Astra and American Acquisition
Assuming the 90 days horizon PT Astra International is expected to generate 10.46 times more return on investment than American Acquisition. However, PT Astra is 10.46 times more volatile than American Acquisition Opportunity. It trades about 0.03 of its potential returns per unit of risk. American Acquisition Opportunity is currently generating about 0.09 per unit of risk. If you would invest 29.00 in PT Astra International on October 9, 2024 and sell it today you would lose (2.00) from holding PT Astra International or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 41.27% |
| Values | Daily Returns |
PT Astra International vs. American Acquisition Opportuni
Performance |
| Timeline |
| PT Astra International |
| American Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Astra and American Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and American Acquisition
The main advantage of trading using opposite PT Astra and American Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, American Acquisition 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 American Acquisition will offset losses from the drop in American Acquisition's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |