Correlation Between PT Astra and HHG Capital
Can any of the company-specific risk be diversified away by investing in both PT Astra and HHG Capital 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 HHG Capital 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 HHG Capital, you can compare the effects of market volatilities on PT Astra and HHG Capital 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 HHG Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and HHG Capital.
Diversification Opportunities for PT Astra and HHG Capital
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTAIF and HHG is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and HHG Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HHG Capital 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 HHG Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HHG Capital has no effect on the direction of PT Astra i.e., PT Astra and HHG Capital go up and down completely randomly.
Pair Corralation between PT Astra and HHG Capital
Assuming the 90 days horizon PT Astra is expected to generate 69.11 times less return on investment than HHG Capital. But when comparing it to its historical volatility, PT Astra International is 19.61 times less risky than HHG Capital. It trades about 0.05 of its potential returns per unit of risk. HHG Capital is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5.00 in HHG Capital on September 2, 2024 and sell it today you would lose (4.43) from holding HHG Capital or give up 88.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.59% |
| Values | Daily Returns |
PT Astra International vs. HHG Capital
Performance |
| Timeline |
| PT Astra International |
| HHG Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
PT Astra and HHG Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and HHG Capital
The main advantage of trading using opposite PT Astra and HHG Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, HHG Capital 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 HHG Capital will offset losses from the drop in HHG Capital's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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