Correlation Between Astra International and OZ Minerals
Can any of the company-specific risk be diversified away by investing in both Astra International and OZ Minerals 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 OZ Minerals 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 OZ Minerals Limited, you can compare the effects of market volatilities on Astra International and OZ Minerals 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 OZ Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and OZ Minerals.
Diversification Opportunities for Astra International and OZ Minerals
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and OZMLF is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and OZ Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OZ Minerals Limited 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 OZ Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OZ Minerals Limited has no effect on the direction of Astra International i.e., Astra International and OZ Minerals go up and down completely randomly.
Pair Corralation between Astra International and OZ Minerals
Assuming the 90 days horizon Astra International is expected to generate 9.95 times less return on investment than OZ Minerals. But when comparing it to its historical volatility, Astra International Tbk is 2.69 times less risky than OZ Minerals. It trades about 0.01 of its potential returns per unit of risk. OZ Minerals Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,773 in OZ Minerals Limited on September 1, 2024 and sell it today you would earn a total of 127.00 from holding OZ Minerals Limited or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 14.95% |
| Values | Daily Returns |
Astra International Tbk vs. OZ Minerals Limited
Performance |
| Timeline |
| Astra International Tbk |
| OZ Minerals Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Astra International and OZ Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and OZ Minerals
The main advantage of trading using opposite Astra International and OZ Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, OZ Minerals 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 OZ Minerals will offset losses from the drop in OZ Minerals' long position.| Astra International vs. Allison Transmission Holdings | Astra International vs. Luminar Technologies | Astra International vs. Quantumscape Corp | Astra International vs. Lear Corporation |
| OZ Minerals vs. NETGEAR | OZ Minerals vs. Playtika Holding Corp | OZ Minerals vs. Getty Images Holdings | OZ Minerals vs. Dave Busters Entertainment |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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