Correlation Between PT Astra and China Health
Can any of the company-specific risk be diversified away by investing in both PT Astra and China Health 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 China Health 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 China Health Management, you can compare the effects of market volatilities on PT Astra and China Health 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 China Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and China Health.
Diversification Opportunities for PT Astra and China Health
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PTAIF and China is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and China Health Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Health Management 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 China Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Health Management has no effect on the direction of PT Astra i.e., PT Astra and China Health go up and down completely randomly.
Pair Corralation between PT Astra and China Health
Assuming the 90 days horizon PT Astra is expected to generate 7.76 times less return on investment than China Health. But when comparing it to its historical volatility, PT Astra International is 4.99 times less risky than China Health. It trades about 0.12 of its potential returns per unit of risk. China Health Management is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 0.41 in China Health Management on August 26, 2024 and sell it today you would earn a total of 0.20 from holding China Health Management or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. China Health Management
Performance |
| Timeline |
| PT Astra International |
| China Health Management |
PT Astra and China Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and China Health
The main advantage of trading using opposite PT Astra and China Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, China Health 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 China Health will offset losses from the drop in China Health's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Lear Corporation | PT Astra vs. BorgWarner |
| China Health vs. Boxlight Corp Class | China Health vs. Siyata Mobile | China Health vs. ClearOne | China Health vs. HUMANA INC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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