Correlation Between PT Astra and Rolls Royce
Can any of the company-specific risk be diversified away by investing in both PT Astra and Rolls Royce 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 Rolls Royce 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 Rolls Royce Holdings PLC, you can compare the effects of market volatilities on PT Astra and Rolls Royce 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 Rolls Royce. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and Rolls Royce.
Diversification Opportunities for PT Astra and Rolls Royce
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTAIF and Rolls is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and Rolls Royce Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rolls Royce Holdings 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 Rolls Royce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rolls Royce Holdings has no effect on the direction of PT Astra i.e., PT Astra and Rolls Royce go up and down completely randomly.
Pair Corralation between PT Astra and Rolls Royce
If you would invest 37.00 in PT Astra International on August 29, 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 | 100.0% |
| Values | Daily Returns |
PT Astra International vs. Rolls Royce Holdings PLC
Performance |
| Timeline |
| PT Astra International |
| Rolls Royce Holdings |
PT Astra and Rolls Royce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and Rolls Royce
The main advantage of trading using opposite PT Astra and Rolls Royce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, Rolls Royce 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 Rolls Royce will offset losses from the drop in Rolls Royce's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
| Rolls Royce vs. Rolls Royce Holdings plc | Rolls Royce vs. VirTra Inc | Rolls Royce vs. BWX Technologies | Rolls Royce vs. Embraer SA ADR |
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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