Correlation Between PT Astra and PetIQ
Can any of the company-specific risk be diversified away by investing in both PT Astra and PetIQ 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 PetIQ 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 PetIQ Inc, you can compare the effects of market volatilities on PT Astra and PetIQ 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 PetIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and PetIQ.
Diversification Opportunities for PT Astra and PetIQ
Poor diversification
The 3 months correlation between PTAIF and PetIQ is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and PetIQ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetIQ Inc 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 PetIQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetIQ Inc has no effect on the direction of PT Astra i.e., PT Astra and PetIQ go up and down completely randomly.
Pair Corralation between PT Astra and PetIQ
Assuming the 90 days horizon PT Astra International is expected to under-perform the PetIQ. In addition to that, PT Astra is 1.05 times more volatile than PetIQ Inc. It trades about -0.01 of its total potential returns per unit of risk. PetIQ Inc is currently generating about 0.08 per unit of volatility. If you would invest 1,407 in PetIQ Inc on September 4, 2024 and sell it today you would earn a total of 1,691 from holding PetIQ Inc or generate 120.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 55.33% |
| Values | Daily Returns |
PT Astra International vs. PetIQ Inc
Performance |
| Timeline |
| PT Astra International |
| PetIQ Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
PT Astra and PetIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and PetIQ
The main advantage of trading using opposite PT Astra and PetIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, PetIQ 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 PetIQ will offset losses from the drop in PetIQ's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
| PetIQ vs. Prestige Brand Holdings | PetIQ vs. Collegium Pharmaceutical | PetIQ vs. Silver Spike Investment | PetIQ vs. Regencell Bioscience Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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