Correlation Between PT Astra and Granite Falls
Can any of the company-specific risk be diversified away by investing in both PT Astra and Granite Falls 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 Granite Falls 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 Granite Falls Energy, you can compare the effects of market volatilities on PT Astra and Granite Falls 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 Granite Falls. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Granite Falls.
Diversification Opportunities for PT Astra and Granite Falls
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PTAIF and Granite is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Granite Falls Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Falls Energy 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 Granite Falls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Falls Energy has no effect on the direction of PT Astra i.e., PT Astra and Granite Falls go up and down completely randomly.
Pair Corralation between PT Astra and Granite Falls
Assuming the 90 days horizon PT Astra International is expected to generate 5.29 times more return on investment than Granite Falls. However, PT Astra is 5.29 times more volatile than Granite Falls Energy. It trades about 0.03 of its potential returns per unit of risk. Granite Falls Energy is currently generating about -0.03 per unit of risk. If you would invest 40.00 in PT Astra International on August 30, 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 Together |
| Strength | Strong |
| Accuracy | 63.64% |
| Values | Daily Returns |
PT Astra International vs. Granite Falls Energy
Performance |
| Timeline |
| PT Astra International |
| Granite Falls Energy |
PT Astra and Granite Falls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Granite Falls
The main advantage of trading using opposite PT Astra and Granite Falls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Granite Falls 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 Granite Falls will offset losses from the drop in Granite Falls' long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
| Granite Falls vs. Mesa Air Group | Granite Falls vs. Skillful Craftsman Education | Granite Falls vs. Sabre Corpo | Granite Falls vs. Hafnia Limited |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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