Correlation Between PT Astra and PT Adaro
Can any of the company-specific risk be diversified away by investing in both PT Astra and PT Adaro 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 PT Adaro 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 PT Adaro Energy, you can compare the effects of market volatilities on PT Astra and PT Adaro 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 PT Adaro. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and PT Adaro.
Diversification Opportunities for PT Astra and PT Adaro
Very good diversification
The 3 months correlation between PTAIF and PADEF is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and PT Adaro Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Adaro Energy 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 PT Adaro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Adaro Energy has no effect on the direction of PT Astra i.e., PT Astra and PT Adaro go up and down completely randomly.
Pair Corralation between PT Astra and PT Adaro
Assuming the 90 days horizon PT Astra is expected to generate 4.53 times less return on investment than PT Adaro. But when comparing it to its historical volatility, PT Astra International is 1.58 times less risky than PT Adaro. It trades about 0.04 of its potential returns per unit of risk. PT Adaro Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 18.00 in PT Adaro Energy on September 3, 2024 and sell it today you would earn a total of 4.00 from holding PT Adaro Energy or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 13.33% |
| Values | Daily Returns |
PT Astra International vs. PT Adaro Energy
Performance |
| Timeline |
| PT Astra International |
| PT Adaro Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
PT Astra and PT Adaro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and PT Adaro
The main advantage of trading using opposite PT Astra and PT Adaro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, PT Adaro 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 PT Adaro will offset losses from the drop in PT Adaro's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
| PT Adaro vs. Morien Resources Corp | PT Adaro vs. Adaro Energy Tbk | PT Adaro vs. Alliance Resource Partners | PT Adaro vs. Brera Holdings PLC |
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 CEOs Directory module to screen CEOs from public companies around the world.
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