Correlation Between PT Astra and Hanover House
Can any of the company-specific risk be diversified away by investing in both PT Astra and Hanover House 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 Hanover House 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 Hanover House, you can compare the effects of market volatilities on PT Astra and Hanover House 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 Hanover House. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Hanover House.
Diversification Opportunities for PT Astra and Hanover House
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTAIF and Hanover is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Hanover House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover House 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 Hanover House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover House has no effect on the direction of PT Astra i.e., PT Astra and Hanover House go up and down completely randomly.
Pair Corralation between PT Astra and Hanover House
Assuming the 90 days horizon PT Astra is expected to generate 2.19 times less return on investment than Hanover House. But when comparing it to its historical volatility, PT Astra International is 5.72 times less risky than Hanover House. It trades about 0.17 of its potential returns per unit of risk. Hanover House is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.70 in Hanover House on September 1, 2024 and sell it today you would earn a total of 0.10 from holding Hanover House or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. Hanover House
Performance |
| Timeline |
| PT Astra International |
| Hanover House |
PT Astra and Hanover House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Hanover House
The main advantage of trading using opposite PT Astra and Hanover House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Hanover House 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 Hanover House will offset losses from the drop in Hanover House's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
| Hanover House vs. Sanwire | Hanover House vs. SNM Gobal Holdings | Hanover House vs. All For One | Hanover House vs. Ggtoor Inc |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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