Correlation Between PT Astra and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both PT Astra and Maple Leaf 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 Maple Leaf 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 Maple Leaf Foods, you can compare the effects of market volatilities on PT Astra and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Maple Leaf.
Diversification Opportunities for PT Astra and Maple Leaf
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTAIF and Maple is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Foods 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Foods has no effect on the direction of PT Astra i.e., PT Astra and Maple Leaf go up and down completely randomly.
Pair Corralation between PT Astra and Maple Leaf
Assuming the 90 days horizon PT Astra International is expected to generate 2.91 times more return on investment than Maple Leaf. However, PT Astra is 2.91 times more volatile than Maple Leaf Foods. It trades about 0.03 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.01 per unit of risk. If you would invest 40.00 in PT Astra International on August 28, 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 Against |
| Strength | Weak |
| Accuracy | 66.88% |
| Values | Daily Returns |
PT Astra International vs. Maple Leaf Foods
Performance |
| Timeline |
| PT Astra International |
| Maple Leaf Foods |
PT Astra and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Maple Leaf
The main advantage of trading using opposite PT Astra and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Lear Corporation | PT Astra vs. BorgWarner |
| Maple Leaf vs. Embotelladora Andina SA | Maple Leaf vs. Signet International Holdings | Maple Leaf vs. National Beverage Corp | Maple Leaf vs. PT Astra International |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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