Correlation Between PT Astra and USS Co
Can any of the company-specific risk be diversified away by investing in both PT Astra and USS Co 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 USS Co 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 USS Co Ltd, you can compare the effects of market volatilities on PT Astra and USS Co 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 USS Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and USS Co.
Diversification Opportunities for PT Astra and USS Co
Very good diversification
The 3 months correlation between PTAIF and USS is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and USS Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co 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 USS Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of PT Astra i.e., PT Astra and USS Co go up and down completely randomly.
Pair Corralation between PT Astra and USS Co
Assuming the 90 days horizon PT Astra International is expected to under-perform the USS Co. In addition to that, PT Astra is 1.89 times more volatile than USS Co Ltd. It trades about -0.01 of its total potential returns per unit of risk. USS Co Ltd is currently generating about 0.03 per unit of volatility. If you would invest 1,636 in USS Co Ltd on September 4, 2024 and sell it today you would earn a total of 304.00 from holding USS Co Ltd or generate 18.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 51.47% |
| Values | Daily Returns |
PT Astra International vs. USS Co Ltd
Performance |
| Timeline |
| PT Astra International |
| USS Co |
PT Astra and USS Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and USS Co
The main advantage of trading using opposite PT Astra and USS Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, USS Co 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 USS Co will offset losses from the drop in USS Co's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Quantumscape Corp | PT Astra vs. Lear Corporation |
| USS Co vs. Sonic Automotive | USS Co vs. Lithia Motors | USS Co vs. AutoNation | USS Co vs. Asbury Automotive Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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