Correlation Between Astra International and Metso Outotec
Can any of the company-specific risk be diversified away by investing in both Astra International and Metso Outotec 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 Metso Outotec 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 Metso Outotec Oyj, you can compare the effects of market volatilities on Astra International and Metso Outotec 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 Metso Outotec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Metso Outotec.
Diversification Opportunities for Astra International and Metso Outotec
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Astra and Metso is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and Metso Outotec Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metso Outotec Oyj 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 Metso Outotec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metso Outotec Oyj has no effect on the direction of Astra International i.e., Astra International and Metso Outotec go up and down completely randomly.
Pair Corralation between Astra International and Metso Outotec
If you would invest 620.00 in Astra International Tbk on September 12, 2024 and sell it today you would earn a total of 25.00 from holding Astra International Tbk or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Astra International Tbk vs. Metso Outotec Oyj
Performance |
| Timeline |
| Astra International Tbk |
| Metso Outotec Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Astra International and Metso Outotec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and Metso Outotec
The main advantage of trading using opposite Astra International and Metso Outotec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, Metso Outotec 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 Metso Outotec will offset losses from the drop in Metso Outotec's long position.| Astra International vs. PT Astra International | Astra International vs. Mobileye Global Class | Astra International vs. HUMANA INC | Astra International vs. Barloworld Ltd ADR |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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