Correlation Between PT Astra and Cathay Pacific
Can any of the company-specific risk be diversified away by investing in both PT Astra and Cathay Pacific 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 Cathay Pacific 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 Cathay Pacific Airways, you can compare the effects of market volatilities on PT Astra and Cathay Pacific 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 Cathay Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Cathay Pacific.
Diversification Opportunities for PT Astra and Cathay Pacific
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PTAIF and Cathay is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Cathay Pacific Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Pacific Airways 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 Cathay Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Pacific Airways has no effect on the direction of PT Astra i.e., PT Astra and Cathay Pacific go up and down completely randomly.
Pair Corralation between PT Astra and Cathay Pacific
If you would invest 528.00 in Cathay Pacific Airways on August 29, 2024 and sell it today you would earn a total of 77.00 from holding Cathay Pacific Airways or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Astra International vs. Cathay Pacific Airways
Performance |
| Timeline |
| PT Astra International |
| Cathay Pacific Airways |
PT Astra and Cathay Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Cathay Pacific
The main advantage of trading using opposite PT Astra and Cathay Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Cathay Pacific 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 Cathay Pacific will offset losses from the drop in Cathay Pacific's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
| Cathay Pacific vs. Singapore Airlines | Cathay Pacific vs. International Consolidated Airlines | Cathay Pacific vs. Air France KLM | Cathay Pacific vs. Qantas Airways Ltd |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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