Correlation Between PT Astra and WH Group
Can any of the company-specific risk be diversified away by investing in both PT Astra and WH Group 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 WH Group 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 WH Group Limited, you can compare the effects of market volatilities on PT Astra and WH Group 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Astra and WH Group.
Diversification Opportunities for PT Astra and WH Group
Very poor diversification
The 3 months correlation between PTAIF and WHGRF is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PT Astra International and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of PT Astra i.e., PT Astra and WH Group go up and down completely randomly.
Pair Corralation between PT Astra and WH Group
Assuming the 90 days horizon PT Astra is expected to generate 68.26 times less return on investment than WH Group. But when comparing it to its historical volatility, PT Astra International is 9.66 times less risky than WH Group. It trades about 0.02 of its potential returns per unit of risk. WH Group Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 19.00 in WH Group Limited on August 27, 2024 and sell it today you would earn a total of 60.00 from holding WH Group Limited or generate 315.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.83% |
| Values | Daily Returns |
PT Astra International vs. WH Group Limited
Performance |
| Timeline |
| PT Astra International |
| WH Group Limited |
PT Astra and WH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Astra and WH Group
The main advantage of trading using opposite PT Astra and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Astra position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.| PT Astra vs. Allison Transmission Holdings | PT Astra vs. Luminar Technologies | PT Astra vs. Lear Corporation | PT Astra vs. BorgWarner |
| WH Group vs. Premier Foods Plc | WH Group vs. Torque Lifestyle Brands | WH Group vs. Naturally Splendid Enterprises | WH Group vs. Aryzta AG PK |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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