Correlation Between PT Astra and Malacca Straits
Can any of the company-specific risk be diversified away by investing in both PT Astra and Malacca Straits 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 Malacca Straits 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 Malacca Straits Acq, you can compare the effects of market volatilities on PT Astra and Malacca Straits 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 Malacca Straits. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Malacca Straits.
Diversification Opportunities for PT Astra and Malacca Straits
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PTAIF and Malacca is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Malacca Straits Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malacca Straits Acq 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 Malacca Straits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malacca Straits Acq has no effect on the direction of PT Astra i.e., PT Astra and Malacca Straits go up and down completely randomly.
Pair Corralation between PT Astra and Malacca Straits
If you would invest 1,060 in Malacca Straits Acq on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Malacca Straits Acq or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
PT Astra International vs. Malacca Straits Acq
Performance |
| Timeline |
| PT Astra International |
| Malacca Straits Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Astra and Malacca Straits Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Malacca Straits
The main advantage of trading using opposite PT Astra and Malacca Straits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Malacca Straits 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 Malacca Straits will offset losses from the drop in Malacca Straits' 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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