Correlation Between PT Astra and Pan Pacific
Can any of the company-specific risk be diversified away by investing in both PT Astra and Pan 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 Pan 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 Pan Pacific International, you can compare the effects of market volatilities on PT Astra and Pan 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 Pan Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Pan Pacific.
Diversification Opportunities for PT Astra and Pan Pacific
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PTAIF and Pan is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Pan Pacific International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Pacific International 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 Pan Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Pacific International has no effect on the direction of PT Astra i.e., PT Astra and Pan Pacific go up and down completely randomly.
Pair Corralation between PT Astra and Pan Pacific
Assuming the 90 days horizon PT Astra International is expected to generate 3.87 times more return on investment than Pan Pacific. However, PT Astra is 3.87 times more volatile than Pan Pacific International. It trades about 0.03 of its potential returns per unit of risk. Pan Pacific International is currently generating about 0.05 per unit of risk. If you would invest 40.00 in PT Astra International on August 24, 2024 and sell it today you would lose (3.00) from holding PT Astra International or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.71% |
| Values | Daily Returns |
PT Astra International vs. Pan Pacific International
Performance |
| Timeline |
| PT Astra International |
| Pan Pacific International |
PT Astra and Pan Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Pan Pacific
The main advantage of trading using opposite PT Astra and Pan Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Pan 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 Pan Pacific will offset losses from the drop in Pan Pacific's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Lear Corporation | PT Astra vs. BorgWarner |
| Pan Pacific vs. Wal Mart de | Pan Pacific vs. Dollarama | Pan Pacific vs. PriceSmart | Pan Pacific vs. Dollar General |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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