Correlation Between PT Astra and Lear
Can any of the company-specific risk be diversified away by investing in both PT Astra and Lear 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 Lear 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 Lear Corporation, you can compare the effects of market volatilities on PT Astra and Lear 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 Lear. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Lear.
Diversification Opportunities for PT Astra and Lear
Pay attention - limited upside
The 3 months correlation between PTAIF and Lear is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Lear Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lear 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 Lear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lear has no effect on the direction of PT Astra i.e., PT Astra and Lear go up and down completely randomly.
Pair Corralation between PT Astra and Lear
Assuming the 90 days horizon PT Astra International is expected to generate 1.05 times more return on investment than Lear. However, PT Astra is 1.05 times more volatile than Lear Corporation. It trades about 0.17 of its potential returns per unit of risk. Lear Corporation is currently generating about -0.09 per unit of risk. If you would invest 25.00 in PT Astra International on September 2, 2024 and sell it today you would earn a total of 12.00 from holding PT Astra International or generate 48.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. Lear Corp.
Performance |
| Timeline |
| PT Astra International |
| Lear |
PT Astra and Lear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Lear
The main advantage of trading using opposite PT Astra and Lear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Lear 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 Lear will offset losses from the drop in Lear'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.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |