Correlation Between Astra International and SQ Old
Can any of the company-specific risk be diversified away by investing in both Astra International and SQ Old 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 SQ Old 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 SQ Old, you can compare the effects of market volatilities on Astra International and SQ Old 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 SQ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and SQ Old.
Diversification Opportunities for Astra International and SQ Old
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astra and SQ Old is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and SQ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SQ Old 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 SQ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SQ Old has no effect on the direction of Astra International i.e., Astra International and SQ Old go up and down completely randomly.
Pair Corralation between Astra International and SQ Old
Assuming the 90 days horizon Astra International is expected to generate 11.93 times less return on investment than SQ Old. But when comparing it to its historical volatility, Astra International Tbk is 1.63 times less risky than SQ Old. It trades about 0.01 of its potential returns per unit of risk. SQ Old is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,831 in SQ Old on November 3, 2024 and sell it today you would earn a total of 1,865 from holding SQ Old or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.76% |
| Values | Daily Returns |
Astra International Tbk vs. SQ Old
Performance |
| Timeline |
| Astra International Tbk |
| SQ Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Astra International and SQ Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra International and SQ Old
The main advantage of trading using opposite Astra International and SQ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International position performs unexpectedly, SQ Old 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 SQ Old will offset losses from the drop in SQ Old's long position.| Astra International vs. Allison Transmission Holdings | Astra International vs. Luminar Technologies | Astra International vs. Lear Corporation | Astra International vs. BorgWarner |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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