Correlation Between Astra International and Katahdin Bankshares
Can any of the company-specific risk be diversified away by investing in both Astra International and Katahdin Bankshares 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 Astra International and Katahdin Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra International Tbk and Katahdin Bankshares Corp, you can compare the effects of market volatilities on Astra International and Katahdin Bankshares 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 Astra International with a short position of Katahdin Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Katahdin Bankshares.
Diversification Opportunities for Astra International and Katahdin Bankshares
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astra and Katahdin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Katahdin Bankshares Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katahdin Bankshares Corp and Astra International 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 Astra International Tbk are associated (or correlated) with Katahdin Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katahdin Bankshares Corp has no effect on the direction of Astra International i.e., Astra International and Katahdin Bankshares go up and down completely randomly.
Pair Corralation between Astra International and Katahdin Bankshares
Assuming the 90 days horizon Astra International is expected to generate 12.15 times less return on investment than Katahdin Bankshares. But when comparing it to its historical volatility, Astra International Tbk is 1.37 times less risky than Katahdin Bankshares. It trades about 0.0 of its potential returns per unit of risk. Katahdin Bankshares Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,073 in Katahdin Bankshares Corp on November 2, 2024 and sell it today you would earn a total of 322.00 from holding Katahdin Bankshares Corp or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.13% |
| Values | Daily Returns |
Astra International Tbk vs. Katahdin Bankshares Corp
Performance |
| Timeline |
| Astra International Tbk |
| Katahdin Bankshares Corp |
Astra International and Katahdin Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Katahdin Bankshares
The main advantage of trading using opposite Astra International and Katahdin Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Katahdin Bankshares 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 Katahdin Bankshares will offset losses from the drop in Katahdin Bankshares' long position.| Astra International vs. Allison Transmission Holdings | Astra International vs. Luminar Technologies | Astra International vs. Lear Corporation | Astra International vs. BorgWarner |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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