Correlation Between PT Astra and Indofood CBP
Can any of the company-specific risk be diversified away by investing in both PT Astra and Indofood CBP 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 Indofood CBP 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 Indofood CBP Sukses, you can compare the effects of market volatilities on PT Astra and Indofood CBP 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 Indofood CBP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Indofood CBP.
Diversification Opportunities for PT Astra and Indofood CBP
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTAIF and Indofood is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Indofood CBP Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indofood CBP Sukses 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 Indofood CBP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indofood CBP Sukses has no effect on the direction of PT Astra i.e., PT Astra and Indofood CBP go up and down completely randomly.
Pair Corralation between PT Astra and Indofood CBP
If you would invest 37.00 in PT Astra International on September 14, 2024 and sell it today you would earn a total of 0.00 from holding PT Astra International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PT Astra International vs. Indofood CBP Sukses
Performance |
| Timeline |
| PT Astra International |
| Indofood CBP Sukses |
PT Astra and Indofood CBP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Indofood CBP
The main advantage of trading using opposite PT Astra and Indofood CBP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Indofood CBP 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 Indofood CBP will offset losses from the drop in Indofood CBP's long position.| PT Astra vs. Astra International Tbk | PT Astra vs. Mobileye Global Class | PT Astra vs. HUMANA INC | PT Astra vs. Barloworld Ltd ADR |
| Indofood CBP vs. Indofood Sukses Makmur | Indofood CBP vs. First Pacific | Indofood CBP vs. Grupo Herdez SAB | Indofood CBP vs. Fraser and Neave |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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