Correlation Between PT Astra and Carsales
Can any of the company-specific risk be diversified away by investing in both PT Astra and Carsales 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 Carsales 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 CarsalesCom Ltd ADR, you can compare the effects of market volatilities on PT Astra and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Carsales.
Diversification Opportunities for PT Astra and Carsales
Very good diversification
The 3 months correlation between PTAIF and Carsales is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and CarsalesCom Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom ADR 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom ADR has no effect on the direction of PT Astra i.e., PT Astra and Carsales go up and down completely randomly.
Pair Corralation between PT Astra and Carsales
Assuming the 90 days horizon PT Astra International is expected to generate 1.18 times more return on investment than Carsales. However, PT Astra is 1.18 times more volatile than CarsalesCom Ltd ADR. It trades about 0.08 of its potential returns per unit of risk. CarsalesCom Ltd ADR is currently generating about 0.04 per unit of risk. If you would invest 28.00 in PT Astra International on August 27, 2024 and sell it today you would earn a total of 9.00 from holding PT Astra International or generate 32.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.87% |
| Values | Daily Returns |
PT Astra International vs. CarsalesCom Ltd ADR
Performance |
| Timeline |
| PT Astra International |
| CarsalesCom ADR |
PT Astra and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Carsales
The main advantage of trading using opposite PT Astra and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Lear Corporation | PT Astra vs. BorgWarner |
| Carsales vs. Trivago NV | Carsales vs. YY Inc Class | Carsales vs. DouYu International Holdings | Carsales vs. Tencent Music Entertainment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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