Correlation Between PT Astra and Mentor Capital
Can any of the company-specific risk be diversified away by investing in both PT Astra and Mentor 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 Mentor 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 Mentor Capital, you can compare the effects of market volatilities on PT Astra and Mentor 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 Mentor Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Mentor Capital.
Diversification Opportunities for PT Astra and Mentor Capital
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTAIF and Mentor is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Mentor Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mentor 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 Mentor Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mentor Capital has no effect on the direction of PT Astra i.e., PT Astra and Mentor Capital go up and down completely randomly.
Pair Corralation between PT Astra and Mentor Capital
Assuming the 90 days horizon PT Astra is expected to generate 2.34 times less return on investment than Mentor Capital. But when comparing it to its historical volatility, PT Astra International is 6.78 times less risky than Mentor Capital. It trades about 0.17 of its potential returns per unit of risk. Mentor Capital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Mentor Capital on September 12, 2024 and sell it today you would lose (0.32) from holding Mentor Capital or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Astra International vs. Mentor Capital
Performance |
| Timeline |
| PT Astra International |
| Mentor Capital |
PT Astra and Mentor Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Mentor Capital
The main advantage of trading using opposite PT Astra and Mentor Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Mentor 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 Mentor Capital will offset losses from the drop in Mentor 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 |
| Mentor Capital vs. SPENN Technology AS | Mentor Capital vs. OFX Group Ltd | Mentor Capital vs. Pinetree Capital | Mentor Capital vs. GreenBank Capital |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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