Correlation Between PT Astra and Electronic Control
Can any of the company-specific risk be diversified away by investing in both PT Astra and Electronic Control 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 Electronic Control 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 Electronic Control Security, you can compare the effects of market volatilities on PT Astra and Electronic Control 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 Electronic Control. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Electronic Control.
Diversification Opportunities for PT Astra and Electronic Control
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PTAIF and Electronic is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Electronic Control Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Control 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 Electronic Control. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Control has no effect on the direction of PT Astra i.e., PT Astra and Electronic Control go up and down completely randomly.
Pair Corralation between PT Astra and Electronic Control
Assuming the 90 days horizon PT Astra International is expected to under-perform the Electronic Control. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Astra International is 7.69 times less risky than Electronic Control. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Electronic Control Security is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.15 in Electronic Control Security on October 24, 2024 and sell it today you would lose (0.07) from holding Electronic Control Security or give up 46.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.78% |
| Values | Daily Returns |
PT Astra International vs. Electronic Control Security
Performance |
| Timeline |
| PT Astra International |
| Electronic Control |
PT Astra and Electronic Control Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Electronic Control
The main advantage of trading using opposite PT Astra and Electronic Control positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Electronic Control 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 Electronic Control will offset losses from the drop in Electronic Control's long position.| PT Astra vs. BLOCK INC | PT Astra vs. Commander Resources | PT Astra vs. PetMed Express | PT Astra vs. Aspen Technology |
| Electronic Control vs. Guardforce AI Co | Electronic Control vs. Iveda Solutions | Electronic Control vs. Bridger Aerospace Group | Electronic Control vs. Supercom |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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